Determining the percentage of ownership in a company is difficult. The percentage is calculated based on how much each owner has contributed to the company.3 min read
Understanding how to determine percentage of ownership in a company is very difficult. Generally, you would calculate this percentage based on how much each owner has contributed to the company. This can, however, be complicated depending on the needs of your company and the number of owners.
The first thing you need to do when attempting to establish the ownership percentage of a company is to decide what amount of money you will need to start your business. Once you have this number, divide from the contribution you are making to the company to calculate your ownership positions. Having this number in place will be very useful when negotiating percentages with your potential partners.
Now, you will need to talk with your partners about the role you plan to take in the business. Your role within the company, including the amount of work you plan to contribute, is just as important in determining your ownership percentage as the money that you have contributed. Once you have completed negotiations with your partners, you should make your ownership percentage final. Be aware that this number represents both how much of the company you own and the amount of profits you receive, now and in the future.
If your business is a corporate entity, you will need to set up the worth of your company by establishing total shares. For instance, if your business has 10,000 shares, all of these shares would represent 100 percent of the ownership of your company. After establishing total shares, you will divide them among your partners by their ownership percentage.
Once the agreement is in writing every owner should review it very carefully and then provide their signature. A notary should witness the signing of the agreement. Keep a copy of this agreement in your business records. It's also a good idea to copy the details of the agreement into your business plan. If your business is a corporate entity, you may need to submit a copy of this agreement to your Secretary of State.
When founders are able to use their initial profits to grow the company and find funding on their own, they will keep complete ownership of the company. Usually, however, startup founders require seed capital to start and expand the company, meaning they would have to give up some percentage of ownership.
If a startup uses outside funding, the founders will usually need either to pay interest on the funding or provide a financial stake to the person or entity who offered the funding. To make sure you keep as much control of your startup as possible, you should only accept outside funding that you absolutely need. For instance, if you give a 25 percent ownership stake in your company to outside investors, the founders of your startup would still have 75 percent ownership.
Typically, startups go through multiple rounds of funding, and with each successive round, the founder's ownership percentage shrinks. This process is known as dilution.
Depending on the number of funding rounds your startup undergoes, outside investors may end up owning more of the company than your founders. If this occurs, the investors can take control of your company, meaning they could fire you and the other founders and put themselves in charge. This means all the hard work you put into starting your company would be wasted.
When starting your company, try to keep your costs as low as possible. Use technology to expand the reach of your company.
Be sure that you never accept more funding than you need. Request only the amount that your startup absolutely has to have to avoid giving up too much ownership.
Don't try to force your company to grow. Instead, let it expand organically, which will allow you to fund growth with profits and not outside financing.
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Safety authorities have closed down operations at the Goliat field out of concerns about electricity.
Norwegian government says production estimates for October are lower because of weather and safety issues offshore File photo by Maryam Rahmanian/UPI. | License Photo
Nov. 21 (UPI) -- Weather and safety issues at oil and gas fields offshore Norway were singled out by the government as reasons why production was lower than expected.
The Norwegian Petroleum Directorate said average daily production for October was 1.54 million barrels of oil, based on preliminary data. That level was about 4.5 percent less than expected.
"The main reasons that production in October was below forecast is that Goliat was closed down most of the month and production from Gina Krog was less than expected, one of the reasons being loading problems due to bad weather," the agency stated.
Authorities with the Petroleum Safety Authority in Norway last week carried out a follow-up audit of Eni operations at the Goliat floating production storage and offloading unit in the Norwegian waters of the Barents Sea. Production is idled until Eni satisfies concerns related to ignition-control services and other measures the PSA said could reduce the threat of ignition.
Production from Goliat comes from 12 oil-producing wells. A peak rate of 100,000 barrels of oil per day is expected from a field estimated to hold around 180 million barrels of oil.
The preliminary estimates for October, however, are about 7 percent higher than final figures from September. The NPD attributed the gains primarily to gains at the Snorre and Ivar Aasen fields.
Norway is important to Europe as it sends nearly all of what it produces offshore to the export market. Its own economy, however, has struggled to maintain momentum, with inflation expected to stay below 2.5 percent over the next few years.
Norges Bank, the country's central bank, said in a letter to the Norwegian Ministry of Finance last week it was recommending the removal of oil and gas stocks from the benchmark Government Pension Fund Global, arguing that it would make Norwegian government wealth less exposed to a "permanent drop in oil and gas prices."
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