When a company has two or more owners it is important to regulate how the business shall be conducted, e.g. through a shareholders’ agreement. It is always best to decide this right from the start. If you wait with negotiating a shareholders’ agreement it can prove much more difficult to agree after a couple of years, depending on how the business has developed. In worst case a conflict may already have arisen between the shareholders.
In order to develop the business, it may be necessary to bring in new owners, who add experience and expertise to the company. This can be done by a private placement, which also provides the company with capital. The company can also raise capital through a rights issue, where existing shareholders have the opportunity to buy additional shares in the company.
If the company needs more capital than the existing owners are prepared to contribute, it may be possible to raise capital from external investors through advertising. However, this presupposes that the company is transformed from a private limited company to a public limited company, which among other things, leads to demands on the composition of the board of directors, the auditor and that the company must have a share capital of at least SEK 500 000. In a public company there shall also be rules of procedure for the board and an instruction for the managing director.
The company can acquire another company through a so-called non-cash issue, where the company pays for the acquisition with its own shares. In this way the acquiring company can grow through acquisitions, without having access to external financing.
Through an employee stock option plan, key employees can be more firmly linked to the company. Launching an option plan at an early stage, when the company’s value is low, can in the long run give a very favorable result for the employees. Options also mean a lower initial investment and a lower risk compared to buying shares in the company. Options can be linked to that the employee continues to be employed by the company. For startup companies it can also be interesting to have so called qualified employee stock options.
Questions regarding company law often arises in the day to day operations. It can be about general meetings with the shareholders, the board of directors and the managing director. Other issues may concern the establishment of subsidiaries and the liquidation of companies.
For companies that are listed on the market there are many questions about the provision of information, corporate governance, and good practice in the stock market. If the company is listed on a regulated market in Sweden (i.e. Nasdaq Stockholm or NGM Equity) the Swedish Code of corporate governance also applies, which you find here.
We provide advice and support in all company law issues and during all phases of the company’s operations.