Becoming a shareholder in limited company

Laurelhedge

Registered User
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Hiya, I'm a new member and hoping to get some advice on an issue. A family member set up a limited company a number of years ago for some business interests. I look after the business interests for this family member and have done FOC since the beginning. It was agreed verbally that any profits were to be shared or used for future joint projects. I would now like to become a shareholder or do something that will ensure my security going forward rather than relying on our verbal agreement. Can anyone offer some baseline advice. Its worth knowing I made no financial contribution to the business interest, but as I said I solely look after the business. So if anyone can advice on the pros and cons of becoming a shareholder, What financial implications there would be for me, ( in the event things go wrong, financially speaking ) or do I have any other options to look at.

Thanks in advance

Laurel.
 
I would now like to become a shareholder or do something that will ensure my security going forward rather than relying on our verbal agreement.
Becoming a shareholder in a small company will give you no security or authority in respect of company actions or profit disbursement. Minority shareholders have no real influence in how the business is run. Profits can easily be eroded by high director remuneration etc. Best option is to agree a payment for the work you have put in or for future work! Wooly verbal agreements can often lead to nothing and if you feel that you are being taken advantage of then move on to something you have some control over!!
 
Thanks for reply 44brendan. Unfortunatly due to the situation, I need to have some authority and control over the assets. The director takes no renumeration at the moment, and has no plans to. Edited to add: The family member is in agreement that I need to have more control on paper, but if there are other ways to do this other than becoming a shareholder I am all ears.
 
I need to have some authority and control over the assets.
Only way of achieving this is a 50/50 shareholding. However, from experience I would advise against this. If problems arise in the business you way well end up accountable for decisions made by your fellow shareholder/director.
 
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