Why many bosses do not choose to be natural person shareholders, direct shareholding?


In the early stage of the company’s establishment, the shareholding structure generally chooses natural persons to hold shares directly.Natural person holds stock directly, simple and direct, cast how much to occupy how much.However, a large number of shareholder disputes or equity disputes are also common in the natural person direct shareholding mode.In this paper, @Xiao, a lawyer in the team, disassembled the structure model of natural person’s direct shareholding, and saw through its advantages and disadvantages, precautions and risk prevention.Direct shareholding by natural persons means that each shareholder holds the equity of the target company according to different input, and holds 100% of the equity of the target company in total.When establishing the structure of natural person’s direct shareholding, attention should be paid to the following aspects: considering the factors invested by each shareholder and its impact on the company’s profits, it is not appropriate to determine the proportion of equity only from the single capital level of “how much money is invested in how many shares”.Consider the control of the founding team over the company to avoid the risk of losing control of the company when the equity is diluted as the company grows.It’s a cliche to avoid equalizing or setting up other kinds of equity ratios that are prone to gridlock.Advantages and disadvantages of natural person’s direct shareholding Based on our long-term practice of equity design, equity incentive and shareholder dispute, we summarize the advantages and disadvantages of natural person’s direct shareholding structure: advantages: 1.Universally applicable.Because it is easy to operate and understand, most limited liability companies directly hold the equity of the target company according to the amount of capital contribution at the initial stage of establishment.2. Clear tax burden.Natural persons directly holding shares, whether in the stage of limited liability company or in the listing of the company, involving equity or share transfer, can calculate the tax payable according to the effective tax payment rules, and can seek the optimal tax payment plan in the tax payment rules.Disadvantages: 1. Uneven input.It is easy to ignore the factors of shareholders except capital, which are directly related to the profits of the company. In the long run, the imbalance of interests will easily lead to shareholder disputes.For example, if you put in $100,000, leave it alone, and divide $1 million a year, the shareholder who works has a problem with it.2. Unstable control of the company.If there is no special setting, when the company has several rounds of financing needs, the proportion of shareholders’ shares will be diluted and the voting proportion will be reduced, which will affect the stability of the control of the company.3. Shareholder deadlock.In the natural person direct shareholding structure, if there is no special setting, the rights of all shareholders are the same share and the same rights. Once there is shareholder dispute, the corporate governance mechanism will fall into deadlock, and in the worst case, it can not be reconciled, leading to the collapse of the company.Finally, from the perspective of solid state, the disadvantages of natural person’s direct shareholding outweigh the advantages.However, the structure mode of direct shareholding by natural persons is still the preferred mode in the early stage of company establishment, but it needs to be viewed and used from a dynamic perspective.If the structure of natural person’s direct shareholding is adopted, it is necessary to measure the role of each shareholder in creating the value of the company, and nest frameworks such as same share and different rights to supplement the shortcomings of natural person’s direct shareholding.When starting a business, the design of equity structure is a “slow” work, slow is for later fast.Rushing is not only slow, it hurts.

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