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When it comes to company shareholdings, not all share rights need to be equal. There can be very good reasons for some shares (and therefore some shareholders) having stronger rights than other shares, and this is achieved through different share classes and the rights attaching to the shares of those classes.
It may be that a certain class of shares should receive a preferential dividend over other shares, or perhaps enhanced capital rights on a sale. Or, yet still, increased voting rights for a specific share. Or a combination. The right fit will depend on the rationale.
Prior to bringing on a new shareholder, consider what rights should attach to their shares. Shares gifted to an employee will likely have a different purpose and require a different shareholder relationship than shares issued to an investor. When it comes to family shares and succession planning, the dynamic likely changes again.
Considering the rationale and understanding your options is important in reaching the correct shareholder relationship and company governance. Planned properly, alongside well-thought-out tax and accounting advice, can create a strong framework for your company's future.
To discuss any of the above further, please contact Philip: philipmiles@bexleybeaumont.com | 07388 344576
