What is 25 25

Blocking minority: co-determining minority shareholder

Dealing with the issue of blocking minority properly

As a start-up, you should carefully consider who you can imagine as a partner. In particular, if an investor wants 25.1%, you should be clear that this is a blocking minority.

If you want to give the future co-owner a blocking minority, the question is how best to deal with the minority owner. Good communication including regular reporting and clear rules of procedure are the basic requirements for a successful future together.

Of course, you can also deal proactively with the issue of blocking minority. For example, as part of the contract negotiations in the participation agreement, you can include an additional clause that, if certain milestones are reached, you have the right to buy back a certain portion at a pre-defined price (so-called call option). If the course of business is positive, you can dilute the blocking minority. In addition to the call option, a number of other agreements are conceivable on how to deal constructively with a blocking minority. Since these are usually regulated within the framework of the participation agreement, it is advisable to consult a lawyer who specializes in contract law at an early stage.

Rules of procedure and blocking minority

An important instrument with regard to the blocking minority is the rules of procedure, which clearly regulate the powers of the management. Here, too, it is advisable to coordinate the rules of procedure in the participation process with all owners at an early stage. Make sure that you create enough space in the rules of procedure to be able to act adequately. Annual budget planning, which is approved by the shareholders, should also give you enough leeway to move the company forward according to your ideas.

Regular reporting, which most investors require on a monthly basis, is certainly also important. Ultimately, however, it is like so often in life: If you communicate well - not only in good but especially in difficult phases of the company - and regularly and the respective investor is included in the decisions with a blocking minority, the possible risks from a blocking minority are very likely be low. The blocking minority is usually only used if the investor no longer believes in you or your strategy. In this respect, it is important to exchange information regularly so that everyone pulls in the same direction.

Blocking minority and compulsory social security

In connection with the blocking minority, managing partners should also examine the issue of social security obligations. Because: Managing partners, who each have at least a blocking minority, can under certain circumstances be exempted from the social security obligation and correspondingly save on social security contributions.

You can find out more about compulsory social insurance here!

Author: Für-Gründer.de editors

As editor-in-chief, René Klein has been responsible for the content of the portal and all publications by Für-Gründer.de for over 10 years. He is a regular interlocutor in other media and writes numerous external specialist articles on start-up topics. Before his time as editor-in-chief and co-founder of Für-Gründer.de, he advised listed companies in the field of financial market communication.