Shares, what do they mean????

[Divineintervention]

My DH has been given 5% of the company he works for, over the years, these are ordinary 'b' shares. He has been given some others recently that he can sell 50% back to his company in Jan 2011 and the rest in 25% parts at later dates. The company intend to float in the next few years. When is his 5% worth anything? Why is January 2011 significant, is that when they'll float or is the owner just avoiding tax?

Bump.......This is the only way I can get through the next couple of years, the hope that we'll get some money.

anyone?

"Ordinary B" shares is not a term of company law - it is something which will be defined in the governing documentation of the company. Generally where there are 2 classes of share, one class will have restricted voting rights or a restricted ability to sell the shares. All companies file copies of their govering documentation (Articles of Association) at Companies House, so you should be able to access them and see exactly what rights and restrictions attach to the shares.

In private companies, shares are usually only worth as much as someone is prepared to pay for them (unless the articles require buy-back and specify a mechanism for pricing)and the market is very restricted. So, in 2011 there will be some value to at least the shares that the company will buy-back. Jan 2011 so far as I am aware has no tax significance, but is likely to be the date when the company thinks it will have enough capital to buy back the shares.

You really need more info to have a clearer idea of what you might get.

Well, apparently the buy back (257) shares will be worth around £88k.. the 5% is of the company as a whole and the company is valued at £92,000,000 (so they predict). When the company start buying back would they have to had floated by then?

if they want to list the firm in a few years, it sounds like they are trying to lock good staff in with the promise that when they list, he'll be a 5% shareholder and therefore will benefit. But how those shares will translate in a listing will be unclear.

Goosey gives good advice on checking out what they're actually giving you. I'd say that 2011 is probably around about when they hope to list perhaps and when they think they'll be in a position to buy those shares.

the 257 are a lock in, the 5% is his no matter what...as in listed on companies house.I'm just hoping he can sell enough to get us mortgage free.