Main benefits of spliting shares 51/49 rather than 50/50

[alvaranz]

Hi All

Im registering a company in the UK and have some doubts about the best way to split shares bewteen 2 main partners.

Which are the main benefits of spliting shares between 2 shareholders in 51/49 rather than 50/50?

Which would be the main benefits/problems or having splited the shares in a 50/50 if any?


Thanks

Julio

 

[yorkshirejames]

Well the 51% gets control.....

However, for two equal partners it should really be 50/50 (and I wouldn't recommend anyone accept 49%) though 51/49 might be appropriate when someone wants to put shares in the wifes name etc.

 

[alvaranz]

Thanks Yorkshirejames,

When you mean control, to which decisions are you referring to?

Thanks

Julio

 

[deniser]

Anything which needs an ordinary resolution rather than a special resolution which requires a 75% majority. Basically the day to day authorisation of the directors' activities.

 

[The Resolver]

The problem with 50/50 is that it leads to stalemate when significant differences of opinion occur. A disproportionate number of the cases coming through boardroomresolve.com are in such a category.

If not appropriate to avoid at least ensure you have a Shareholders Agreement to set up some pre-agreed rules so as to minimise disputes (eg delegate powers of one shareholder as director in certain fields - trigger a share purchase by one of the other or some other dispute busting provision in certain major stalemate situations - etc). A SA can also give some protection to the 49% man in a 51/49 split eg to protect his seat on the Board.

Just noticed - its my 1,000th post!