We are five engineering students, going to start up a company. As there are many competitor companies in the market, we were looking for an investor to start very big.
Fortunately, we found an investor who is very impressed with our business plan. Now, we are incorporating our company with him as a partner. So, there will be 6 directors in the company.
But the problem is, he is demanding 51% shares of the company and rest 49% to us.
He is supporting us -
By giving us a very big space for our office requirements without any rent or lease.
Giving us all financial support, we will need. We, five founders are not investing any money in the company.
He has very good reputation in the society, so our business projects will face greater exposure, resulting in greater return.
As he has many good connections in the country, many problems, we will be facing, would be easily vanished. Because, the country is India. :P (If you know, what I mean.)
So, I am asking -
Is it good or is it bad incorporating company with him? If it is bad, then how can we make him agree to decrease his share below 50%?
As he is a non-technical partner and we are all technical partners. So, who will have the power of taking decisions of the company? Our investor, because he is having 51% of shares, making him majority share holder! Or it will depend on voting of directors (Majority Rule)!
What would happen, if he sold all 51% shares to other company? Will we have to work under the orders/instructions of the new 51% share holder? And will the board of directors be reappointed, As new majority share holder removing us from board of directors?
Will the salary to employees be given from company shares? If yes, then can we make us share non-diluted and the investor shares diluted?
As he holding the 51% shares of the company, will we be working under his orders as employees or equal partners?
I have many questions and many confusions in my mind. Please help me to resolve all these problems.
Thank you in advance :D