It is difficult to start a business, and it is even more difficult to keep a business. In the ever-changing environment, the most important concern of business founders is how to prevent outgoing and grasp the control of the enterprise, and this article will share how to defend their control.
Weighted voting rights system
The Company Law clearly stipulates that shareholders may have different rights of the same shares. It means that the shareholder's equity ratio is relatively small, but the shareholder can vote relatively large. It can be agreed, for example, Yi**Dong only has 20% of the equity, but it can be agreed that it has 80% of the voting rights.
Sign a Concerted Action Agreement
The founding shareholders may sign a concerted action agreement with the investors, stipulating that when voting at the shareholders' meeting, the investors and the founding shareholders shall agree with the resolution, and the investors shall also approve of the resolution.
Shareholding platform
When the investor is registered in the articles of association of the company, it is registered with a specific shareholding entity, such as a limited partnership or a limited liability company, and the founding shareholder or a person designated by the founding shareholder becomes the general partner or executive partner of the limited partnership.
If the shareholding entity is a company, the founding shareholder or a person designated by the founding shareholder shall become the legal representative and sole executive director of the company.
Delegation of voting rights
The investor issues a power of attorney to the founder, and the voting rights of the equity held by the investor are granted to the founding shareholders for exercise, which facilitates the formation of a consensus, that is, the investor entrusts the voting rights to the founders out of voluntary or involuntary, trust or non-trust. Both parties are required to sign a voting rights entrustment agreement.
Control the proportion of voting rights
Article 43 of the Company Law stipulates that amendments to the articles of association, increases or decreases of registered capital, divisions and mergers of companies, and changes in the form of companies require a majority of more than two-thirds of the voting rights before they can be passed.
That is, through the above provisions, when the company's equity is transferred, as long as the equity of the founding shareholders is not less than one-third, the above matters can be vetoed.
One veto
The founder can also make a list of powers: for example, involving the company's foreign investment, dividends, the company's budget, final accounts, major personnel appointments and dismissals, including the company's equity incentive plan, listing plan, including the change of seats on the company's board of directors, the appointment and dismissal of board members, and other major matters, the founding shareholder can have a veto power to ensure his control over the company.
Example: Huawei's Ren Zhengfei only holds 1 share, but can still control the whole of Huawei, mainly with a veto.
Equity holding
For investors who are not familiar with it, they can sign an equity holding agreement, and after a period of running-in, the two parties have established a final trust relationship, and when the time is ripe, the nominee equity can be converted into registered equity.
At any time, founders cannot blindly choose partners and accept capital, and must be cautious to remain rational.