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A single promoter can either incorporate a sole proprietorship firm (Unlimited liability) or a One Person Company (Limited Liability). Now can you issue shares to your employees in these types of companies? No. You cannot issue shares to anyone else. Will you have 100% control over the company? Yes. You will.
Wazzeer Professional Network
ProfessionalHow should a single founder register his company which is going to be bootstrapped? He wants to give shares to his employees and at the same he wants to own 100% of the company.
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Wazzeer Professional Network
ProfessionalA single promoter can either incorporate a sole proprietorship firm (Unlimited liability) or a One Person Company (Limited Liability). Now can you issue shares to your employees in these types of companies? No. You cannot issue shares to anyone else. Will you have 100% control over the company? Yes. You will.
Then which type of company allows you to issue shares to your employees? A Private limited company does. Will you have 100% control over the company after the issue of shares to your employees? Yes and No.
If you issue common equity to your employees, then you dilute your control in the company and hence you will not have 100% control over the company. However, if you issue shares without voting rights then your employees are entitled to any dividend that you may issue (without dividend rights is also possible but in that case, your company’s shares are worth nothing to your employees) but will not have any voting rights. Hence, in this case, you will retain 100% control of your company.
almost 3 years ago
View answer
How should a single founder register his company which is going to be bootstrapped? He wants to give shares to his employees and at the same he wants to own 100% of the company.
-
Wazzeer Professional Network
ProfessionalA single promoter can either incorporate a sole proprietorship firm (Unlimited liability) or a One Person Company (Limited Liability). Now can you issue shares to your employees in these types of companies? No. You cannot issue shares to anyone else. Will you have 100% control over the company? Yes. You will.
Then which type of company allows you to issue shares to your employees? A Private limited company does. Will you have 100% control over the company after the issue of shares to your employees? Yes and No.
If you issue common equity to your employees, then you dilute your control in the company and hence you will not have 100% control over the company. However, if you issue shares without voting rights then your employees are entitled to any dividend that you may issue (without dividend rights is also possible but in that case, your company’s shares are worth nothing to your employees) but will not have any voting rights. Hence, in this case, you will retain 100% control of your company.
almost 3 years ago
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