What can be correct share division for PPP of a company in India

805 votes

Dear sir,
As per the details provided by you, it is not possible to ascertain the problem being faced by you. Please highlight the issue, so that we are able to provide the solution to it.
Please feel free to contact us.

Advocate Abhishek Kumar LawRato

597 votes

It is difficult to state as to what would be the best deal for you and what would be not without knowing the business details and the valuation it has it in date and will have it in coming future. As far as tabulation are concerned one may guide you as per the law prevailing in both the countries provided you show us the papers.

Advocate Pulkit Prakash LawRato

585 votes

There is no legal restriction or prohibition or regulation concerning the manner in which the capital of a company may be divided. It is entirely up to the parties to mutually agree to a ratio. Using the PPP is not prohibited by Indian law so it could be one of the ways in which the ratio is decided. Ultimately, the only requirement under Indian law is that a private limited company must have at least 2 shareholders and at least 1 director resident in India. Barring that, the parties are free to decide on the capital ratio and contribute the capital to the company.

Advocate Aditya Singha LawRato

871 votes

For the australian end of the query, I would suggest you seek advice from an australian lawyer (even on PPP basis,you may be able to overcome the PPP disadvantage and still have 50:50 equity share). So far as the Indian operations are concerned, you can structure it independent of the australian holding although it is not mandatory to do so. Unless the Indian entity is expected to be a wholly owned subsidiary of the australian company, you may seek to have a 50:50 partnership since this is your domestic area and you may be in a better position to negotiate assuming that your role and responsibilities in the Indian entity would be far greater than any one else. Although, it would be prudent to seek proper legal advice, please understand that a major part of the negotiation would be purely commercial and a business call. What is important to understand is what term sheet / MoU you have entered into to decide the actual structuring of the business. Would suggest you share more info/ documents for proper advice.

Advocate Joydeep Nath LawRato

696 votes

Ok you guys were in touch earlier also and I have spoke to your Australian partner on Skype ans you !!

I think your question is not complete and major information is missing on equity and secondly equity distribution has nothing to do here with PPP your partner is acting smart and his arguments on PPP doesn't apply to equity but economics per se. How does it matter if you are from India and etc If you both started a company together you should share equity equally or can be divided on the basis of amount work and contribution. In future if your company comes to India , it will be operating as 100% subsidiary or holding company of parent Australian company's. And I don't understand the reserve of investor here at moment , do u already have investors ? etc because the company will be registered and same time the equity will be decide and second thing anything less than 10% in any company means you don't even have voting rights or you don't have decision taking authority . So please speak someone make the counsel your structure in current and what arrangement with subsidiary company . From this piece of information any advice is not going to helpful

Advocate Nischal Arvind Singh LawRato