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I am a co-founder of a startup in the UK, the other co-founder wants to give me options instead of % equity because he believes when I eventually exit I will pay less tax and the company will too and it will be better for me. How ever it makes me feel less connected to the company and feel like I am not part of management.

What do you think I should chose as a co-founder? and why?

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    Probably only you can answer your question, but some musings: are you really a co-founder (which, to me, implies more-or-less equality) or are you being invited to help setup/fund someone else's business? Is this other person only going to take options themselves? Why does he think/assume you'll "exit" before he does? – TripeHound Apr 4 at 7:26
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    If you are a co-founder and have invested money (which is what founders do) then you definitely have the equity. – Joakim Danielson Apr 4 at 17:52
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In most companies the power to appoint members of the board and vote on important issues lies with the shareholders. Those who hold the majority of the shares (more than 50%) effectively have total control of the company. Options however only provide a right to buy shares at a specific price at some point in the future. Until you own those shares, you do not have any voting rights.

The specifics depend on the type of company you have, its constitution and structure. I would suggest that you seek independent legal advice to ensure that your expected rights as a co-founder are preserved.

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