How are startups distributed equity? How to distribute the equity of a startup

Since it is a start-up, to avoid the thunderstorm after the operation of the enterprise in the later stage, and bear unnecessary risks and losses, it is recommended to find a professional institution for private customization, such as Beijing Zhongjia Law Firm and Facaida, which can go deep into the company, and tailor the equity plan in combination with the company's situation, and the plan is scientific and resolutely implemented. Rest assured for life. If you don't understand, you can also find out.

How is equity distributed in a startup?

First, according to the proportion of capital contribution, capital contribution is the basis for equity distribution, according to the amount of capital contribution and the proportion of equity distribution in the total amount of capital contribution, this method may make each investor obtain the right to share the source of the branch search ratio. The second method of equity distribution is equal distribution. Two shareholders, one with a 60% stake and the other with a 40% stake, but the equity is divided equally.

The method of equal distribution can weaken the control of the founders of the company and influence the company's decision-making.

Article 3 of the Company Law stipulates that the shareholders of a limited liability company shall be liable to the company to the extent of their subscribed capital contributions; Shareholders of the hidden state of shares are liable to the company to the extent of the shares they subscribe.

Legal analysis: In addition to the company's partners, employees, external advisors and investors are also involved in the distribution of the company's shares. When designing the equity structure in the early stage of entrepreneurship, issues such as later financing, talent introduction, and employee incentives should be considered, and part of the equity should be reserved in the early stage of equity distribution.

The equity distribution of the entrepreneurial team cannot be egalitarian, and whether the contribution of each partner matches the equity share should be considered in the equity distribution. Many entrepreneurial teams often ignore the issue of quarreling before equity distribution in the early stage of starting a business. But at this point, it's easy to discuss how to distribute equity, which will lead to a distribution that doesn't meet everyone's expectations, which in turn leads to problems for the team and affects the company's growth.

Legal basis: Article 121 of the Company Law of the People's Republic of China If a listed company purchases or guarantees material assets or guarantees exceeding 30% of the company's total assets within one year, it shall be decided by the general meeting of shareholders and approved by more than two-thirds of the voting rights held by shareholders attending the meeting.

The first is to distribute according to the proportion of capital contribution, which is the basis for equity distribution, and the equity distribution is carried out according to the proportion of capital contribution and the total capital contribution, which may make each investor obtain more or less equity ratio.

The second method of equity distribution is equal distribution. Two shareholders, one with a 60% stake and the other with a 40% stake, but the equity is divided equally. Evenly distributed methods can weaken the control of the founders of the company and influence the company's decision-making.

Legal basisArticle 3 of the Company Law stipulates that the shareholders of a limited liability company shall be liable to the company to the extent of their subscribed capital contributions; The shareholders of the shares are liable to the company to the extent of the shares they subscribe.