Dividing of shares in a private company.

[bigboy529]

Hi all
A very noob question about shares in a private company.

The company currently has 2 shareholders / owners, one guy having 80% and the other 20% of the shares. A third person then want to buy in to the company and he wants to buy 51% of shares.
If he buys 51%, how does the remaining 49% get divided between the 2 original owners, does that 49% get split up 80/20?

Thanks

 

[Dalaw89]

On the same basis as the 80/20 but now on the 49percent. Laymens terms 80percent of 49 etc. Hope that helps.

 

[Eti1]

Depends. Is the new shareholder buying shares from the existing shareholders, or is the company issuing new shares?

 

[Venomous]

39.2 / 9.8


Would be an 80 / 20 split

So
51 / 39.2 / 9.8


So effectively 80/20 are selling the controlling share of their business to a third party. Meaning they now have to ask 51 permission...

 

[bigboy529]

39.2 / 9.8


Would be an 80 / 20 split

So
51 / 39.2 / 9.8


So effectively 80/20 are selling the controlling share of their business to a third party. Meaning they now have to ask 51 permission...

Thanks for this.

 

[Blue Shirt]

Depends. Is the new shareholder buying shares from the existing shareholders, or is the company issuing new shares?

Good question. The buyer could also just buy 51 shares from the shareholder holding 80 shares, leaving him with 29 shares and the other s/h still with 20 (assuming 100 shares issued).

There are many ways of skinning the cat on this one.