The partner is divorced, what happens to the shares owned by his spouse?

The founder's divorce is no longer a private matter, and the divorce affects the stability of equity and the operation and management of the enterpriseWhen it comes to this topic, many people can't help but askHow many people consider the divorce of partners in the articles of association?To be sure, this should have been taken into account by the founders of the company long ago in the context of the contract content as the in-house counsel is becoming more standardized, but because the entrepreneurs are preoccupied with the company's strategic planning, the thinking in this regard may not be deep enough.

Generally speaking, many corporate founding teams make a set of questions about the accidents that may occur in the entrepreneurial work of the partners, and any one of these things will trigger certain terms to take effect. This includes divorce, incapacity, and more. Once the trigger condition occurs, it goes to the exception handler. Some entrepreneurs believe that the founding team should sign a treaty with the partners at the beginningIf the partners divorce, the spouse is not given the right to vote, only dividends. There was support for such a treaty, and if it was stated in the charter, there should be no problem, because it did not affect ownership. In fact, if the legal or "political" relationship between shareholders, directors and the board of directors is clear, then it is clear where the voting rights are. Either keep it or buy it back. All you need to consider is whether the partners buy it themselves, or whether they buy it with other shareholders, or whether they buy it with other shareholders. Theoretically, equity and voting rights can be dealt with separately, and voting rights are not necessary to have equity. However, China's Company Law currently does not support the separation of voting rights and equity, and the current transitional solution is to do indirect separation through a limited partnership, and legal persons are not as convenient as natural persons to operate. This is also why some founders of enterprises hope to separate voting rights and equity through the establishment of articles of association, but they cannot achieve it, because the articles of association cannot violate the company law.

Concerted Action Agreement, is it feasible?

Many lawyers say that voting rights and equity are two different things, and that they can be completely separated, but in fact this is a theoretical argument or that this may be the case in other countries. This is different in China, where domestic companies generally have the same shares and rights, unless they sign a concerted action agreement. In other words, through it, the founders of domestic companies in China can achieve 100% control of voting rights through a concerted action agreement. Practice has proved that ensuring the uniqueness of the company's decision-making is indeed important for start-ups, and when several partners make decisions together, there may be continuous changes in the company's strategic decisions, and the efficiency is greatly reduced. If the company signs the Unity of Action Agreement early on, the matter will become relatively easy to resolve. Generally speaking, once the founder or partner of the company divorces, the distribution of equity and voting rights is likely to be problematic, but in fact, only the divorce of the actual controller of the company may affect the company's operation, which is why the divorce of the actual controller of many companies in the United States requires the approval of the board of directors. In addition, the sooner the "Unity of Action Agreement" is submitted, the easier it will be to sign, and the later it will be, the more difficult it will be. What's more, it's not just something that can be done by writing it in the charter, you need to sign a special agreement. Because we often need to take into account various factors, the legal text is often very lengthy. The nature of the equity issueAs the article said at the beginning, why did Tianchuang talk about the original demand for equity this time?It is because many founders rarely think deeply about the contradictions that may arise from equity and divorce. Of the $100,000 invested by a married partner, from the day he invested, $50,000 belonged to his spouse from a legal point of view, although his spouse never appeared in the company. This is a foundational concept. So if one day the partner divorces, what will happen to the 50,000 that his spouse has?tc

Case simulation

Assuming that the total share capital of the enterprise is 1 million, 100,000 is 10% of the shares.

Ideally, once a partner divorces, 5% of his or her spouse's share goes directly to the partner.

In addition, let's assume that the partner and his wife are named Xiao Li and Xiao Hong, respectively.

One day, Xiao Li and Xiao Hong divorced, and if the company directly took back Xiao Hong's shares, it would be a violation of the marriage law. Because the 5% is Xiaohong's property, no one has the right to take it back directly.

So how do you take it back?The solution given by many people is: not to take back Xiaohong's shares, and to retain Xiaohong's dividend rights. However, the company's team hopes that Xiaohong will have nothing to do with the company from the day of the divorce and will not leave any possible "sequelae". So the only way is to lose money, the key is how much to lose?And Xiaohong must accept this compensation. Suppose Xiaohong sees that there is a huge value-added opportunity for the company in the future, and proposes not to pay compensation, so she hopes to hold the 5% of the shares all the time and pay dividends every year in the future. What to do at this time?At this time, it is much more troublesome than a limited partnership due to issues involving property rights and other aspects. Therefore,The scheme that can be referred to is,Establish a limited partnership enterprise and put all partners in the limited partnership.

The relevant national laws and regulations are:

Where a people's court hears a divorce case involving the division of the joint property of the husband and wife in the name of one party in the partnership enterprise, and the other party is not a partner of the enterprise, when the husband and wife reach an agreement through consultation to transfer all or part of their share of the property in the partnership to the other party, it shall be handled separately according to the following circumstances:

(1) With the unanimous consent of the other partners, the spouse shall obtain the status of a partner in accordance with law;

2) If the other partners do not agree to the transfer and exercise the right of priority under the same conditions, they may divide the property obtained from the transfer;

3) If the other partners do not agree to the transfer or exercise the right of first refusal, but agree to the partner's withdrawal or return part of the share of the property, the returned property may be divided;

4) If the other partners neither agree to the transfer, nor exercise the right of first refusal, nor do they agree to the partner's withdrawal or return of part of the property, it shall be deemed that all partners agree to the transfer, and the spouse shall obtain the status of partner in accordance with law.

That is, theoretically, we can make the following assumptions:Xiao Li invested 100,000 yuan, so it was written in the agreement that if he quit, he would pay 100,000 yuan plus a little interest. Assuming that the compensation is 120,000, Xiao Li will take 120,000 yuan and go home to his wife 60,000 yuan. After 3 months, let Xiao Li get back 120,000 yuan to the company and become a partner again. In this way, his wife has nothing to do with the company at all. Moreover, in the early days of the partnership, only Xiao Li's signature was required, and no signature from his wife was required. All of this, Little Red will not be in the office from beginning to end. Theoretically, what about in practical operation in the country?It is not easy to quit at a low price, then divorce, and then re-invest at a low price. In particular, if the stock price of a company is lower than the current fair value, it will be considered a violation. There are three phases in the company's equity pricing operation space:(1) Before financing;(2) after financing, before listing or listing;(3) Listing or after listing. In these three different stages, the company's stock price is usually getting higher and higher, and the company's decision-making mechanism is becoming more and more complex. And the further back you go, the less room you have to operate. Tianchuang summary.

ticoheyday's advise

1. The divorce rate is on the rise, and the divorce rate of entrepreneurs is likely to be higher than the average.

2. The spouse is the largest partner of the entrepreneur. If there is a marriage change, it is likely to lead to a change in the company's large equity, or even a change in the actual controller of the company. The divorce of Wu Yajun of Longfor Real Estate led to a change in the market value of more than 20 billion shares. BlueFocus Sun Taoran's divorce led to a change in the market value of nearly 200 million shares of the listed company. Tudouwang Wang Wei, even if it is a pre-marital equity, has paid more than 7 million US dollars in cash + the price of missing the best listing opportunity due to the backyard.

3. As the scale of the company grows, divorce is no longer a private matter within the family, but will affect the interests of many stakeholders, including brothers, investors and even public shareholders who "fight the world" together when starting a business.

4. Everyone starts a business in partnership, mainly based on the trust of the partner. If there is no run-in and a sense of trust, the spouse of the partner becomes a shareholder of the company and enjoys the right to vote, which will bring great uncertainty to corporate governance.