Share allocation in Limited company

[wood1e]

Hi,

If a company is formed with 1000 shares...

How are they divided when there are three sharholders with 1/3rd each?

Obviously 3's don;t go into 1000...and if they allocate 300 shares each. Can two of the shareholders club together and allocate the remaining 100 shares to themselfs, and effectivley run the company, and take decisions away from the third shareholder...

Bascially could the two wiht a joint 600 shares put one over the thrid shareholder with only 300 shares...

 

[MarkPearson]

I think you can choose any amount of shares for your company.

so 3000 and have 1000 each

 

[Ozzy]

Hi Woodie,
The 1,000 shares is likely to be the "authorised" share capital, meaningthe total number of shares the company is "allowed" to issue to share holders.
It is possible that the shareholders could have as little as 1 share each to make them all equal 1/3 share holders in the company. Without seeing the Memorandum of Association (or stock transfer or similar forms) I cannot know what the share split actually is.

There are minority protection rights which protect a minority shareholders rights, the actual legal statitute evades me now but there is law to protect minority shareholders.

Effectively though, the directors and shareholders can issue remaining authorised shares to someone new. So if there are remaining shares in the company generally speaking the directors can issue those shares to someone else.

There may also be a clause in the Articles that gives an additional voting right to a Chairman, which will affect the decisions on direction of a company made at a general meeting where the shareholders vote.

My advice, get a shareholder agreement drawn up.