Founder to Founder: Shareholding Clarity – The Essential Conversation

The Hidden Risks of Informal Ownership in Entrepreneurship

When you first started your business, things were simple. A friend gave you GHS 20,000 to get going. Another introduced you to your first investor. A third co-signed your first lease. At the time, everything felt like a shared journey — built on trust, goodwill, and excitement. But as the business grows, so do the complexities. And suddenly, someone who was once an ally says: “But I’m a co-founder. I own half of this, remember?” You pause, realizing that nothing was ever written down.

This is one of the most common and painful conflicts in the entrepreneurial journey. It’s not just a Ghanaian issue — it’s a global problem. Founders often get swept up in the thrill of building something together, assuming that shared effort means shared ownership. However, businesses are not built on emotions or vibes. They require structure, clarity, and legal agreements — especially when it comes to ownership.

What Is Shareholding, Really?

In its simplest form, shareholding means owning a portion of a company. This ownership comes with specific rights, such as the right to dividends, voting on major decisions, accessing financial records, and even transferring or selling the shares. However, it also carries risks. If the business faces legal issues or is liquidated, shareholders could lose their investment.

Importantly, shareholding is not about contribution alone. You can contribute money, time, or ideas to a business and still not be a shareholder unless that arrangement is clearly documented and legally executed. Without formal agreements, ownership can become a source of conflict, misunderstanding, and even legal battles.

The Three Types of Confusion

At Horsham Consulting, we have seen three common traps that founders fall into:

Emotional Equity:
“I was there from Day One.”
Being part of the journey does not automatically make someone a legal owner. Businesses must define and allocate equity based on agreed terms, not feelings.

Verbal Promises:
“You said I’d get 30%.”
Verbal promises are dangerous. They are hard to prove, open to interpretation, and fuel conflict down the line.

Unclear Funding Terms:
“I gave you money, so I own part of the business.”
Was it a loan? A gift? A share purchase? Many contributions from friends and family sit in legal limbo, causing tension as the business grows.

Clarity Is Kindness

It might feel awkward to raise legal questions with your closest allies. But real friendship — and real business leadership — requires clarity. If someone is a shareholder, give them a share certificate. If someone gave you a loan, draw up a loan agreement. If someone is just helping out, thank them — and move on without ambiguity.

You are not being harsh. You are being responsible. And if you have already gone years without documentation, it is not too late. Call a meeting. Bring in a neutral advisor. Settle it properly now before it becomes a legal or reputational issue later.

Founders, Protect Your Vision

Shareholding mistakes can cost you: control of your business, investor interest, boardroom harmony, access to future capital, and personal peace of mind. Too many brilliant founders have watched their vision unravel because they failed to formalize who owns what. Do not be one of them.

Start with These Steps

• Review your incorporation documents. Who are the listed shareholders and what percentages do they hold?
• If it is not what was agreed (or not agreed at all), initiate a clean-up process with legal support.
• Document all capital contributions — whether loans, gifts, or equity.
• Establish a shareholder agreement to outline expectations, rights, and exit terms.
• Keep your share register up to date with the Registrar of Companies.

Structure Is Not a Betrayal

We must unlearn the idea that structure signals mistrust. It does not. Structure protects relationships. It honours contributions. And it preserves the business.

As I always say to clients: “Structure early, not after the fight.”

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