Saturday, 8 December 2007

Company Structure

the two sites I've used are

http://www.companieshouse.gov.uk/

and

http://www.oyezstraker.co.uk/main-03-00.htm

It takes a lot of looking, but I've decided on the following

I'm going to be a private company limited by share. There will be 200 shares of which I will only issue 120. The 120 will have a value of £1 but I will be selling 59 of them at £75 each. This initially means I have a majority stake and the company is worth £120 for paying back to shareholders if it goes under. However the 59 shares I sell at a premium will raise £4425 - enough for two more 100 print runs for book 2 and 3 and some marketing, PR and slush money.

Each share that an investor purchases initially gets them 0.833% stake of the company.

However, there are still 80 shares left unissued. If i choose I can keep a majority share by taking another 40 shares myself and selling the other 40 at ANY premium I want. If I do this, I will be diluting each share to 0.5% of the company but raising extra capital.

If we need more money I will offer it first to the existing shareholders, then to the market.

For practical purposes (I will have quite a number of shareholders) I might set up the company with only me as a shareholder (that way it only needs me and one other's signature) and then transfer the shares at a later date - which I think incurs 0.5% stamp duty.

The forms you need are form 10, form 12, a memorandum and articles of association and share certificates and share transfer forms.

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