Is having more shareholders an extra burden?

[munya]

Hi all,

Suppose a company has only one director who's also the sole shareholder. If the company hasn't opened a bank account yet, would taking onboard a minority shareholder (2%) before doing so increase the complexity of the process? Also, would taking onboard this minority shareholder require more responsibilities, e.g., AGM?

Any advice will be much appreciated.

Thanks

 

[LancashireMan]

Whats the purpose of giving another person 2%? If it's an incentive, there are other ways to achieve that.

Generally better to hang onto your 100% unless there is a compelling reason to issue shares to others - even if it is only 2%.

 

[munya]

Whats the purpose of giving another person 2%? If it's an incentive, there are other ways to achieve that.

Yes, its purpose is to serve as an incentive. What other ways would you advice beside tweaking the salary figure?

 

[LancashireMan]

You could offer a simple bonus system - 2, 3, 4, x% of annual net profits.