Shares and their impact

[OllyGolf]

I was wondering if somebody could offer some professional advice.

Last year I started a company as the only Director. Since then an acquaintance has done a lot of work on the project and wants to be my partner.

I proposed a 60/40 split of shares, which he agreed to. But he wanted a 50/50 split of decision responsibility.

Is it possible to do this? Have a different split of shares to responsibility? And if so, how?

 

[PreciseHandTools]

What do you want from this arrangement? If you want him onboard the above agreement, then go for it...because he'll think he has equal say...which if you want, you can let him have equal say, but if it comes down to it & you can't agree, your 60% shareholdings wins!

Incidentally, how do you expect to get to a decision if both of you have 50/50 equal say & you don't agree on the way forward?

 

[OllyGolf]

I think you've hit the nail on the head. Even if we employed a board of directors, as majority shareholder, I would still have the power to over-rule.

Ultimately he just wants to ensure the business moves forward in its current form. Lets say we made rubber boots, he doesn't want me to change my mind and start making rubber boats instead. He just wants an equal say, not an equal number of shares.

What would happen if I split the shares 50/50? Is that a very bad idea?