Equity restructuring, profit multiplication! Hello everyone! Welcome to the online course of Xiangcai Consulting, I am Teacher Liu.
Equity incentive practice expert Liu Shiyong
The theme to be shared with you today is: the nine life and death lines of equity that bosses must know.
We believe that the most heard of should be the three life and death lines of equity, so we will give you a comprehensive analysis of the nine life and death lines of equity incentives today, so that everyone can avoid some minefields when doing equity allocation in the future.
The first line is a stake greater than 67%. Some major events, such as the increase or decrease of the company's capital, the modification of the company's articles of association, the increase or reduction of the company's registered capital in the main business of the change, the merger, division, dissolution, liquidation, etc., require more than 2/3 of the voting rights to pass. If the equity ratio exceeds 67%, then his rights are equivalent to holding 100% of the shares, and generally in the early stage of entrepreneurship, we will recommend that the equity ratio of the major shareholder or the founding team should exceed 67% as much as possible.
The second life and death line, holding more than 51% of the shares, will have a relative controlling interest, that is, ordinary resolutions, such as the election and replacement of directors to apply for the dismissal of the general manager, modify the investment plan guarantee, etc., then these are more than 51% of the shareholders agree to it, generally before the venture capital comes in, it is recommended that the major shareholder or the founding team hold more than 51%. If a subsidiary is set up, the parent company is also required to hold more than 51%.
The third life and death line, more than 33%, has a veto power of major matters, note that the one-vote veto power mentioned here refers to the company's major matters, not all matters, it is relative to 67%, such as modifying the company's articles of association, changing the company's main business, the company's merger, division, dissolution, liquidation, etc., then if more than 34% of the voting rights are vetoed, then the resolution is impossible to pass, so we also call it the security control line, if the number of shareholders of the company is relatively large, It is recommended that the shareholding ratio of major shareholders should also exceed at least 34%.
The fourth life and death line, 30%, the tender offer line of listed companies, what is called a tender offer? The Securities Law of the People's Republic of China stipulates that when the acquisition of shares reaches more than 5%, then it is necessary to notify, and more than 30% of the acquisition offers are issued, and the acquirer must submit the acquisition report of the listed company to the securities regulatory authority under the State Council in advance, and the matters stipulated in the name change are changed.
The fifth life and death line, 20% of the major industry competition warning line. Owning 20% of the shares, we call it the competition warning line, that is, if you hold more than 20% of the shares of a company, in principle, you cannot do an industry that is similar to the company and has a competitive nature.
The sixth life and death line, 10% of the right to temporary meetings. If the shares exceed 10%, you will have the right to question, investigate, sue for liquidation and apply for dissolution of the company, of course, not that you hold 10% of the equity, you can ask for the dissolution of the company at any time. The dissolution and liquidation of the company mentioned above requires more than 67% of the voting rights to pass, so if the equity ratio is more than 10%, then you have the right to apply, but it needs to meet some conditions.
The seventh life and death line, the warning line of 5% major equity changes. If the Company Law stipulates that if the shares exceed 5%, it will be in the warning line of major shareholder changes, and if there is a major shareholder change, assuming that the company has not yet been listed, it will affect the listing of the company. Assuming that the company has already been listed, it shall immediately submit an interim report on the situation of the relevant major event to the securities regulatory authority under the State Council and the stock exchange. So this point tells us that from the perspective of the rules, the shareholding ratio is less than 5%, at least two benefits, the first is that there is no lock-up period constraint, and the second is that there is no need to show up, and there is no need to disclose the reduction.
The eighth life and death line, 3% provisional proposal power. 3% of the shares have the right to make a provisional proposal, can hold a small meeting in advance, individually or collectively hold more than 3% of the company's shares, can make a provisional proposal ten days before the general meeting of shareholders and submit it in writing to the convener, of course, this line only applies to the joint stock limited company, the limited liability company does not have such complex procedural provisions.
The ninth line of life and death, 1% subrogation litigation rights. 1% of the shares have the right of subrogation, derivative litigation, can indirectly investigate and sue, and can sue the shareholders in the name of the illegal acts of The Director.
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