I think this is more of a legal M&A question. I'd like to know your opinions on that.
There's a private company with 3 shareholders. Two active investors have 40% of the issued shares each, the third shareholder is a passive investor that has 20% of the shares. They never had a shareholders agreement signed.
After a few years of operations, the company needs urgently a few millions so the 2 active investors put in each half of the capital needed. However, they did not make any formal capital increase and dilution of the third shareholder.
Now, if the first active shareholder wants to sell off his shares, what percentage of the company does he actually own?
Two active shareholders inject the capital as shareholder loans, no share capital increase. If the first active shareholder wants to sell his shares it will be based on the company value with him holding 40% and getting his shareholder loan back with returns separately (usually before the sale of his shares).
What if there was no shareholder loan formal agreement and there is no interest payment?
This is a clusterfuck of a situation that will most likely end up in some sort of lawsuit unless the shareholders like each other and can all sit down now and agree to something. Legally the investor has 40% of the company but he'll take a deep discount if he tries to sell because it's a minority interest in a private illiquid company and there's possible liability and legal fighting over the "loan" and not having a shareholder/membership agreement and docs in place to spell out a capital call in the first place.
There is probably some legal precedent that governs this situation, but it sounds like a clusterfuck and will likely end in a lawsuit
I've never dealt with a company that has multiple owner with no partnership agreement, LLC agreement, etc.
bump
I agree with Dingdong08. This well end up in a legal situation unless they dilute the 3rd shareholder based the valuation of the company at the timing of the capital call and put the documentation in place.
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