When five people set up a limited liability company, the distribution of equity is an important issue. Generally speaking, the equity distribution should be reasonably distributed according to their respective capital contribution, workload, experience and other factors. Specifically, equity distribution can be carried out in the following ways:
Distribution according to the proportion of capital contribution: that is, equity distribution is carried out according to the proportion of their respective capital contributions to the total capital contribution. This method is simple and clear, but it may ignore the contribution of other factors to the company's development.
Distribution according to the proportion of workload: that is, equity distribution is carried out according to the proportion of the workload undertaken by each company to the total workload. This way can reflect their respective contributions and efforts, but may ignore the influence of other factors on the company's development.
According to the proportion of experience and skills: that is, according to the proportion of experience and skills in their related fields to the total experience and skills, the equity distribution is carried out. This way can reflect their professional ability and experience, but may ignore the influence of other factors on the company's development.
In addition to the above methods, equity distribution can also reach an agreement through negotiation. In the negotiation process, various factors can be comprehensively considered to reach a fair and reasonable equity distribution plan.
What if five people can't reach an agreement on equity distribution?
If the five people can't reach an agreement on the equity distribution, they can consider solving it through legal channels. Specifically, a lawyer or an arbitration institution may be entrusted for mediation or arbitration. If it still cannot be resolved, it shall be voted in accordance with the Articles of Association or relevant laws and regulations.
When five people set up a limited liability company, the distribution of equity is an important issue.
Legal basis:
Article 32 of the Company Law of People's Republic of China (PRC), a limited liability company shall keep a register of shareholders, which shall record the following items: (1) the name and domicile of the shareholders; (2) Capital contribution of shareholders. (3) The serial number of the capital contribution certificate. Shareholders recorded in the register of shareholders may exercise their rights according to the register of shareholders. The company shall register the names of shareholders with the company registration authority; Where the registered items are changed, the registration of change shall be handled. Without registration or change of registration, it may not confront a third party.