What number of shares should I give myself when registering a company?

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I would like to start a limited by shares company, and will have two other shareholders involved in the company that I plan to register. But it is ultimately my company, and so I’m wondering whether I should have more shares than them. Do you have any advice regarding how many shares I should give myself versus others?

Answers

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If you are setting up a limited company on your own, you only need to issue one share for yourself. However, if you plan to set up a company with other people, you must distribute the shares in a way that reflects the level of each shareholder’s investment and involvement to ensure the division of ownership is fair.

When setting up a company with other people, or selling shares to other people during or after incorporation, the person who contributes the most to the business will usually take more shares that everyone else. In such instances where you wish to retain overall control, you must keep a majority of the shares for yourself - at least 51%, if not more. Any less than 51% will mean that the other shareholders collectively have equal say or hold a majority of the power.

For your situation where your company will have three shareholders, you could issue any number of shares from 5 - this will allow you to hold a majority of the shares (at least three) and issue one or more shares to the other two shareholders. Ideally, issuing shares in multiples of 10 is the easiest way to work out what percentage of the company each person owns.

2 years ago
 

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