shares at start-up

[Traffic]

Quick question, hopefully not too complicated answer...

Forming a Ltd company, two people with a 3rd person joining later on who would get an equal share (he can't join today due to other assignments).

It's mainly a consulting business with perhaps a small media arm attached, would 100 shares suffice upon registration?

[wheelerc]

If you have 100 shares, you won't be able to give the new person a third of them from your existing shares, but you could issue 50 new shares to make thing equal.

I tend to set things up with 1 share per person, and issue new shares of needed.

I'm sure there will be better advice from someone who does this more regularly.

[anonymous-user]

1 share per person would give you the equal position you are seeking.

[Traffic]

Thanks, is it as simple as that? if so great :-)

[LooneyTunes]

It’s a simple as that to allocate the shares in those proportions but less simple to deal with potential future discourse.

Make sure your shareholders agreement is going to work!

It often involves some difficult discussions but better to do it earlier rather than later, especially in consulting type businesses where:
1) those joining probably have the experience/skills to be solo consultants; and
2) there is significant scope for disagreement if things grow and the split between each individual’s relative contribution grows. For example what’s the guy worth who sells the most profitable engagement the form has seen, but is barely involved in its delivery? Or the guys who deliver tirelessly but can’t sell?

Above all, make sure you don’t end up in a position where someone can leave but retain unreasonable economics based on the efforts of others.

[Traffic]

Thanks all.