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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11447
Experience:  30 years as a practising solicitor.
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I am a director of a private limited company in the UK,

Resolved Question:

I am a director of a private limited company in the UK, which was incorporated in 2014 and limited by shares. I declared 1 share with a value of 1.00GBP to myself. Now that my company has grown, I am looking to sell shares to friends who are eager to invest but am concerned and can't find any clear and concise information online.I want to maintain ownership of the company naturally, so understand that I need to issue shares to myself for a broader percentage than that which I issue. But I heard that because I am a private limited company, I cannot allot shares to friends who are interested. If I were to allot shares to myself, then to two of my friends each for different amounts, what should my process be so that I confirm to the laws and regulations of my country (UK) and is there anything I should know when doing so that might cause me trouble.Thanks
Submitted: 12 months ago.
Category: Law
Expert:  JGM replied 12 months ago.

You have to abide by the Articles of Association of the Company. Typically, as a director you can allot and register shares to whoever you please and those people would share ownership. What you have heard to the contrary probably relates to a situation where a director or directors have the right NOT to register a share transfer. In any event you can allot shares and yes you would want to retain a higher percentage to retain control. A better way might be to amend the Articles to create different classes of share, e.g., A shares which would carry voting rights and B shares which would not. That way your investors can carry B shares for dividend purposes but only the holder of the A shares would control the company. I hope that helps. Please leave a positive rating so that I am credited for my time.

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