# Ownership of shares in a small company

I've been wondering this for a while now:

If a small company has 2 shares and person A owns 1 of 2 and person B owns the other 1, what happens to their shares if person C wishes to buy shares.

Is it number of shareholders divided by 100? (assuming they all get an equal share).

What would happen if person A wants to keep 50% of the shares but person B does not wish to give up their 50%?

I just cannot get my head around this at the moment. Thank you and sorry if it's a stupid question!

TIA.

what happens to their shares if person C wishes to buy shares.

From who? If a company has only two shares, then one of those two shares must be sold to C.

Now if A and B decide, as the majority owners, they they want to issue more shares so that they can sell some to C, then they can do that, but then one of them will have to give up some of their ownership.

Note that at this level, the number of shares is largely irrelevant. The discussion revolves more around what percentage of the company is being sold, and the number of shares simply reflect that. Meaning, A and B could issue 1 billion shares, and each share would have a value of 1 billionth of the "value" of the company (however anyone buying the shares wants to calculate that). If C wanted to buy 10% of the company (again, from either A or B), he would need to buy 100 million shares.

You seem to think that shares can be created out of thin air. This is not true. A company issues a specific amount of shares that are then traded among willing buyers and sellers in the open market. If C wants to buy shares of a company, then there must be someone else willing to sell them.

what happens to their shares if person C wishes to buy shares

Some one must be willing to sell without which C can't buy. So any of the below can happen.

• A sells his share, new owners are B and C.
• B sells his share, new owners are A and C.
• A and B decide to create additional share and sell it to C. Now A, B and C are equal owners of the company.

Many other combinations as agreed by A and B