Questions tagged [shareholders]

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A departing director wants to convert his directors loan and owed salary into shares. How do we value the shares, and what are we obliged to pay?

We are raising investment with individual shares valued at £5. A founder & director is leaving the company and claiming owed salary and directors' loans need to be paid or converted to shares. We ...
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Can U.S. companies legally document stock buybacks as assets?

In the U.S., Jack creates a C-corporation and funds it with $100, receiving 100 shares in return. Greg, a passive investor, then gives the company $900 in exchange for 900 newly issued shares. The ...
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inheriting a share in a limited company: at what point do the rights from the share pass if membership consent has not yet been obtained?

I would like to know which laws regulate inheritance of shares in LLC and whether there are any difficulties with the moment of transfer of rights from the share, if the heir has inherited a share, ...
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Is an LLC Membership Certificate Legally Binding?

I'm wondering if an LLC Membership Certificate that has been signed by the owner of the company and promises a certain amount of stake in the LLC is legally binding/would hold up in court if there was ...
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What are the simplest ways to gain a Property/Proprietary Interest in equity shares held by a defendant?

I don't understand how someone can have "a property interest that is not a security interest". I'm assuming the example below, of a claimant havinmg "a priorietary interest in shares ...
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3 answers
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What is preferential distribution?

It was written in this answer: There may be different classes of shares in a company with different rights (voting, dividends, preferential distribution etc.) In shareholding law, what is ...
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2 votes
1 answer
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Can there be a company shareholder which is not a company owner?

I would define a shareholder as someone who is eligible for a certain percentile amount of profit from a company, from dividends and/or from selling the company; this person may or may not be an owner ...
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Who owns the company before the founders' shares vest (HBO's Silicon Valley plot point)?

In the HBO show Silicon Valley, an important plot point is when one investor fires the founder/CEO against everyone's objections. Originally, the founder gave 10% of the company to investor A (a ...
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Can board members have unequal voting rights at a for-profit corporation in California?

California requires multiple board members when there are multiple shareholders. With equal voting rights, this can allow a minority shareholder, who is a board member, to have a disproportional ...
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shareholders agreement with impossible to meet obligation

in shareholders agreement it says person X would do something by Jan 1. the contract wasnt signed and ascended until feb 1 at which time the person still hadnt done the thing. is person X in breach or ...
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Can a company control who its shareholders are?

The current owners of a privately held company can decide who to sell the business to. (For example, a startup can choose which VC firms to raise from.) But what about a publicly-traded company? Can ...
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Do Revenue Sharing Agreements Carry on when the company is sold?

I've had an agreement with the Virginia company I work for to receive 1% of the generated revenue on a monthly basis. Of course that was after a long time of me being with the company (the bulk of my ...
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Can Company Profits Be Split Equally Amongst Two Partners With Different Shares?

I intend to create an 'inc.' moral entity in Quebec, Canada (corporation). Can I own 75% of the shares while splitting profit 50/50 with my partner? (In a legally binding manner)
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How can i protect my self from contract termination in Germany?

I was offered a job position in Germany, this contract gives me the right to buy shares in the company (GmbH) after working for 4 years in this position. As I understood if I quit or my employer ends ...
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2 votes
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Can a plaintiff in a fiduciary breach of trust sue a particular director instead of the company?

I heard this story from Peter (not actual name): Peter co-founded a company with John. John earns 80% of shares while Peter owns 20% of shares. John being greedy empties all company coffers ...
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Appraisal Rights in Chapter 11?

Assuming some number of shareholders believe that the bankruptcy process is inadequately compensating them (i.e. by setting the company valuation too low and thus giving creditors too much equity in a ...
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Audio Recordings as Evidence

I have many a times seen people deal with their Stock Brokers telling them to sell or buy shares and as the prices fluctuate quite quickly they don't have the time to get everything in writing. I once ...
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2 votes
1 answer
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By what mechanism does a parent company control its subsidiary?

Company B is a fully-owned subsidiary of Company A, a huge international conglomerate. All the employees of Company B are in the orgchart of Company A, all under Company B's CEO. That CEO's boss is a ...
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What is the effective date of a new shareholder?

Suppose a soon to be shareholder (New Shareholder) subscribes to become a shareholder of an LLC (Company A) on 1 November 2000 through a subscription letter. New Shareholder transfer cash to the ...
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3 answers
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How exactly is founder stock created?

Suppose that I found a C corporation, Superlative Widgets Inc., within the U.S. I would like to both fund the corporation and issue myself 100,000 shares in a way that avoids or minimizes my personal ...
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4 answers
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How can I protect myself as a minority shareholder when I don't have the money to pay legal fees?

I'm about to sell shares to an angel who is going to become the majority shareholder of my company. The money will go into the company as new shares. I can only pocket it through salary agreements. ...
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How did facebook got away from fiduciary lawsuit when they diluted Saverin's shares?

Saverin eventually settled out of the court, for 5% equity. But why didn't he proceed for his original 30% equity when it was clear that facebooks majority shareholders failed to exercise the ...
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How would a minority share holder VETO power be provisioned in a company constitution?

To protect minority shareholder and potentially attract investors, a company would give minority shareholders the power to veto certain decisions. Typically decisions that would erode their ...
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Is it lawful for my old company to buy back all my shares today but pay me over the course of several years?

Brief context is that I quit a startup with some vested shares (not options) that I have already paid taxes for. Their attorney is arguing that the shareholder's agreement allows them to buy back all ...
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Does company have the right to purchase my vested shares after I quit?

Here's some context in case it's relevant. I worked at a startup which issued shares (not options) to employees. A good chunk of my shares have vested over the 4-year vesting period. I have ...
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2 votes
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Why is it legal to look at pending stock orders for some participants

another question indicates that market participants can take a look at the orders for a stock, option or futures. An ordinary investor can only look at the BID and ASK, but not the entire series of ...
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Is it advisable for a person write his own contract if he is good in english but don't know legal jargon?

A lawyer scared me by saying, yes you can right your own contract but chances are most of your clauses won't hold in court cause you don't know legal jargon. However, I know english and my english is ...
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Who approves the creation of new shares in a Proprietary Limited Company?

I'm struggling to find a concrete answer for this. Who approves the creation of new shares in a Proprietary Limited Company? Is it the Board of Directors (through board resolution), or Shareholders (...
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2 votes
2 answers
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What does 'The Company' refer to in this proprietary ltmited company constitution?

I'm trying to understand who has the right to issue new shares in my proprietary limited company (wherther through board or general resolution). I found the following clause in the constitution: ...
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32 votes
1 answer
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What's the difference between a share and a stock?

In my company constitution I found the following: At any time, the directors may allot and issue unissued shares subject to clause 8, or grant options over unissued shares, on any condition and ...
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Can a private company board of directors issue new shares?

If so, wouldn't this be unfair against shareholders as this would devalue their shares and voting rights?
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3 votes
1 answer
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Where are Share Classes defined in an LLC?

Where are Share Classes defined in an LLC. For example, if I look at facebook's constitution at the link below, there are no definitions for share classes. I was thinking there would have been such a ...
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2 votes
1 answer
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What's the difference between Ordinary, Class A and Class B Shares?

I incorporated my company using an Online service. Not knowingly, I created class A, B and Ordinary shares during the incroporation. However, in the company constitution there are no mention of what ...
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Loan conversion in company shares

We have a small business with the following situation: 3 partners with the following share distribution: 10%, 45%, 45%. One of the 45% partners has made €75k loan to the company which is convertible ...
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7 votes
1 answer
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Does a shareholder of a company also have copyright rights?

If I buy, say, a share in The Walt Disney Company, does that give me part ownership in the intellectual property? Does this ownership then give me the right to copy it?
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4 votes
1 answer
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Where is the legal responsibility to maximise shareholder value stated in UK company law?

I can not find where in the model articles for UK companies it says the responsibility of the directors is to maximise shareholder value. https://www.gov.uk/government/publications/model-articles-for-...
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2 votes
1 answer
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Do I have to formally accept a transfer of shares to me, in the UK? Or can they be transferred to me without my consent?

I have become estranged from my business partners. One of them insists that I am owed shares in the company, but I don't wish to accept them, not least for reason that I believe the shares to be ...
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0 votes
1 answer
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Can a company refuse service to a share holder?

Assume a large public company. Would the director, or majority share holders of a company be able to legally refuse service to a share holder (on non protected-class grounds)? Would the quantity of ...
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'payable in like kind'? 'non-electing' shares?

each share of Series B Preferred Stock shall, by virtue of such transaction and on the same terms as apply to the holders of Common Stock, be converted into or exchanged for the aggregate amount ...
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interpretation of an article

The term "Common Stock" as used in this Appendix B means the Company's Common Stock without par value, as the same exists at the date of filing of the Amendment to the Company's Amended Articles ...
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difference between 'assigned' and 'endorsed' in this context?

Each such notice of redemption shall be irrevocable and shall specify the date that is the redemption date, the redemption price, the number of Shares to be redeemed, the place or places of ...
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2 votes
4 answers
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How does shareholders' limited liability work in practice?

Given that: A shareholder in a limited company is not personally liable for any of the debts of the company, other than for the amount already invested in the company and for any unpaid amount ...
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1 answer
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Whose instructions should be followed in a dispute - majority shareholder vs company director? (UK)

Many years ago, Contractor Fred signed a general works contract with John Smith, owner and sole director of Small Company Ltd. The contact was agreed directly between Fred and John (as opposed to ...
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1 vote
1 answer
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I am a shareholder in a Private C-Corp, what are my rights?

I am a shareholder in a private c-corp. I am trying to get financial records for the company and they are ignoring me. I believe this is my right as a shareholder. What options do I have? Am I ...
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1 vote
1 answer
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Do shareholder agreements have to be identical within the same company?

I am being told that the various potential shareholders must sign an identical shareholder agreement. I have a problem with a clause relating to confidential information and have been told it ...
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Examples of shareholder derivative lawsuits where shareholders prevailed ( USA/EU/Canada)

When a publicly traded company's stock value falls due to some incident or event faced by the company, the shareholders have sued the company alleging breach of duty among other causes of action. The ...
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1 answer
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Full ownership split between two legal entities

Hope this is fit for Legal.SE. I work with large financial institutions and often obtain diagrams representing the legal entity perimeter (i.e. full list of legal entities, with ownership % and "who ...
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1 vote
1 answer
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Researching of decades old oil well deed?

In 1981 my father purchased interest in an oil well, for which I have the paperwork. I am attempting to do some research on behalf of my mother to see if, after all this time, there was/is any value ...
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1 vote
1 answer
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Question regarding share of profit and loss in LLP

A started an online business (India) on his own. Now he wants B and C as partners to register an LLP. But A wants to retain 20% of share (he calls it founder's share) aside without any liability of ...
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3 votes
1 answer
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What limited legal rights do bondholders, suppliers, and employees have in a corporation?

According to this article corporations prior to the 1970s were run differently; until the idea that Milton Freidman put forth that a corporation's job was to maximize shareholder value; before that ...
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