Whether it seems simple or is totally confusing to you, the share structure of your business is really important.
Do not over look it.
When you set up a business and it’s just you or a few people, the share structure is usually very basic and that’s fine.
However, in the future the following things may happen:
- The owners may want to take dividends
- Shareholders leave and new ones join
- The business seeks investment
- The business wants to reward employees with shares
- There is a disagreement between the shareholders
- The business is sold
If the structure, the class of shares, the voting rights and underlying agreements are not robust then all of these things can cause a massive headache.
It’s best to speak to an accountant at an early stage to make sure your current structure is fit for purpose and that you understand the main considerations when making decisions about your business.