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shares of the company vs shares in the capital of the company


Kenny同志

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The capital of a company is usually the cash in the bank as it were. As a business you would have working capital, money you access to to invest in stock, machinery, property etc but not the day to day running of the business usually.

 

So you may have shares in the cash in the bank but not the other assets of the business, but I have admit this seems weird, but I don't know enough about the more specialised side of investing.

 

I would usually expect to "buy shares in a company." with no qualifications as to what part of the company assets.

 

But I would double check all this as I am no expert, just a dabbler :)

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Folks, I came across this sentence in the same document. What does that highlighted text mean? I am not sure if it is natural English but apparently, it is not everyday English. 

 

Your help is greatly appreciated. Thanks in advance. 

 

Edit: For confidential reasons, the picture has been removed. 

 

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Thanks 889 and Roddy.

 

Roddy is right, 'less' is the word that confuses me and I am still quite at a loss.

 

the "less" is very far from what it modifies, which is the "Purchase Price". 

 

But the sentence says 

 

 

The Purchase Price to be paid for the Defaulting Party’s Shareholder Interest will be an amount in cash equal to the value of the Defaulting Party’s Shareholder Interest agreed, ...

 

 

Kenny同志愚鈍, how is 'less' supposed to modify the 'Purchase Price'? It would be best if someone could paraphrase the sentence for me. :help

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Could have been clearer, but I was on my mobile. The sentence doesn't stop at 'less' - it's telling you:

The purchase price will be an amount calculated according to this method, using values from this date, MINUS an amount calculated in (a) .... and (b) and © if the document has them. 

 

(a) seems to explain that if a third party has lent money to the company on behalf of the defaulting party, the company will deduct that amount from the Purchase Price and use it to repay the third party. 

 

I find it hard to follow what's going on from the fragment posted. It's presumably some kind of shareholder debt arrangement, where the shareholders are contracted to provide ongoing loans, and this sets out what happens if those loans are not made? It's confusing, as that would mean not defaulting on repayment of a debt, as you'd normally use the word 'default', but defaulting on the promised making of a loan. 

 

Hope that helps, because I'm thoroughly confused now ;-)

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If the shareholder is the sole owner of the company, then deducting the shareholder loan amount from the share price would make sense. The share purchase price on default could be calculated on some type of gross asset value, which would include cash from the loan, without netting off against debts. It would not make sense to require the lender to pay extra for the loan the company borrowed.

If the defaulting shareholder doesn't own the whole company, then the share purchase price should be reduced by his pro rata share of the loan amount.

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I guess it's a JV, and the text simply means that if one of the parties breaks the agreement then the other(s) can buy back that defaulting party's stake in the company, either at an amount they agree on, or failing that, the amount will be determined by clause 14.8, minus any money that the defaulting party owes the other(s).

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Thanks, Gato and Mayo.

 

 

I am sorry I didn't reply to this thread earlier but I was really really busy.

 

 

I have one more question, if you folks don't mind. This question is also related to the same document, a shareholders' agreement.

 

 

The last page of the agreement requires a 'signature of director' from each of the parties. Is this director a 董事? Someone tells me that an ordinary 董事 usually does not has the authority to sign such agreements.

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I don't know what you mean by an 'ordinary' 董事 is. My dictionary translates 董事会 dǒngshìhuì as n. board of directors, so I assume a 董事 is a director who would sit on the board, if the company were big enough to have such a thing.

 

My sense -- but I'm far from certain -- is that in the UK at least, a director would have such authority, particularly in a smaller company. 

 

Also look at it from the opposite direction: would it be realistic for someone in a company who wasn't a director to be in a position to sign key documents (no)?

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