SHARES

What is Reserved Share

Definition

• Reserved shares refer to a portion of shares that are set aside during the initial issuance of shares

Purpose

• Commonly reserved for future use, such as:
  • Fundraising
  • Business expansion or restructuring
  • Employee incentives (e.g., ESOS)

Key Features

• Reserved shares are not allocated immediately
• They are only distributed when needed

Management Method (LLP)

• Some companies set up an LLP to hold these reserved shares
• Main purposes include:
  1. Flexible share management
  2. Asset protection

Advantages of LLP

• The LLP structure allows founders to distribute profits flexibly
• It may also provide additional protection under certain conditions