Shares ownership

[Surf_guy]

I hope someone can answer my noob question.

I bought some shares in a Australian Proprietary Company.

The owner told me he only wanted to sell 30% of the shares and keep 70% for himself. But due to needing more capital he was forced to sell another 20%. Now he has never paid for these shares but on selling them claimed they are his and the company owes him for the 20% sold because it was his money?

Now this does not sound right to me at all but can someone confirm this.

 

[Value Collector]

I hope someone can answer my noob question.

I bought some shares in a Australian Proprietary Company.

The owner told me he only wanted to sell 30% of the shares and keep 70% for himself. But due to needing more capital he was forced to sell another 20%. Now he has never paid for these shares but on selling them claimed they are his and the company owes him for the 20% sold because it was his money?

Now this does not sound right to me at all but can someone confirm this.

So he owned 100% of the shares, then he sold 30% to you leaving 70% for him, now he has sold another 20%.

So you own 30% he owns 50% and the new investor owns 20%

Is that right?

What do you mean he never paid for the shares?

 

[Surf_guy]

So he owned 100% of the shares, then he sold 30% to you leaving 70% for him, now he has sold another 20%.

So you own 30% he owns 50% and the new investor owns 20%

Is that right?

What do you mean he never paid for the shares?

Yes that's right.
As in he never paid monies for any shares. They were company shares. So he didn't buy them then resell them.

 

[Value Collector]

Yes that's right.
As in he never paid monies for any shares. They were company shares. So he didn't buy them then resell them.

But didn’t he own 100% of the company to begin with?

What do you mean they were “company shares”?

 

[Surf_guy]

But didn’t he own 100% of the company to begin with?

What do you mean they were “company shares”?

Yes i guess he did own the company because he started it.

Shares owned by the company. It's a public share company.

 

[Value Collector]

Yes i guess he did own the company because he started it.

Shares owned by the company. It's a public share company.

When you start a company, you put capital into and are issued shares, you can then sell these shares if you want, or you can even create new shares and issue them to other people.

I am a bit confused, are you saying it’s a public company? Is it listed on any exchange?

 

[McLovin]

When you start a company, you put capital into and are issued shares, you can then sell these shares if you want, or you can even create new shares and issue them to other people.

I am a bit confused, are you saying it’s a public company? Is it listed on any exchange?

I'm pretty sure he's saying the company issued the 20% of shares, they weren't sold by the founder to an investor.

 

[Surf_guy]

When you start a company, you put capital into and are issued shares, you can then sell these shares if you want, or you can even create new shares and issue them to other people.

I am a bit confused, are you saying it’s a public company? Is it listed on any exchange?

Ah no sorry private company i meant.

 

[Surf_guy]

I'm pretty sure he's saying the company issued the 20% of shares, they weren't sold by the founder to an investor.

Yes the owner founder sold 20% to a new investor but nows claims it is his money beacuse they are his shares.

 

[McLovin]

Yes the owner founder sold 20% to a new investor but nows claims it is his money beacuse they are his shares.

Well he's got no idea what he's talking about. What's the nature of the business? The founder doesn't sound like someone you want to be trapped in a pty ltd company with.

 

[Joules MM1]

Yes the owner founder sold 20% to a new investor but nows claims it is his money beacuse they are his shares.

this reads as though you do not know/understand the company set-up/structure

the best thing for you to do is take all paperwork and see a company tax accountant (accredited)
as that accountant can tell you concisely your rights and how much you actually own (whom you can sell to and what, how much, you have the right to on-sell)

 

[Surf_guy]

Ok thanks for the advice and comments

 

[Value Collector]

Yes the owner founder sold 20% to a new investor but nows claims it is his money beacuse they are his shares.

If they were existing shares that he owned, then yes the money is his.

However if the company issued new shares, the money should go into the company’s bank account