Key takeaways
- Identify the share movement before calculating ownership.
- Keep the final share count beside every percentage.
- Trace the payment to the stated recipient.
Stock sale: count the shares after the transaction
A stock sale transfers corporate shares. To understand a proposed percentage, ask whether the buyer purchases existing shares from a holder or receives newly issued shares from the company. The share count and the payment recipient can change even when the buyer writes the same check. State those inputs before discussing a percentage.
Investor.gov describes stock as an ownership position in a corporation. That basic meaning does not make all shares economically identical. Investor.gov: Stock
For a named-state example, Delaware's corporate statute permits classes with different voting rights and preferences. It is not a nationwide rule for dental ownership. The documents and applicable professional-ownership law need separate legal review. Delaware Code: Section 151
Fix the unit before calculating
Request a dated ownership table showing issued shares, holders and classes. Ask the responsible adviser which other rights belong in the analysis. This teaching example deliberately leaves out options, conversion rights, treasury shares, repurchases and different classes. A real table must address whatever the actual documents create.
Do not use “units” and “shares” as loose substitutes. Identify the legal entity and the interest being sold. This page's arithmetic assumes a corporation with one equal class of shares. It does not classify an LLC interest, determine who may own a dental entity or decide how the transfer is taxed.
The asset versus stock sale guide covers the broader transaction choice. Here the decision is narrower: does the proposed share movement produce the percentage the parties intend, and who receives the stated payment?
Compare two invented share movements
Assume the company has 120 issued shares. The founder holds 90 and an associate holds 30. Each share has equal rights for this exercise. A new buyer pays an invented $300,000 for 30 shares. This is not a dental valuation or an offered market price. There are no fees, taxes or other share changes in the example.
| Supplied transaction | Founder | Associate | New buyer | Total shares |
|---|---|---|---|---|
| Before either case | 90 | 30 | 0 | 120 |
| Buy 30 existing founder shares | 60 | 30 | 30 | 120 |
| Company issues 30 new shares instead | 90 | 30 | 30 | 150 |
In the existing-share sale, the buyer holds 30 divided by 120, or 25%. The founder holds 50% and the associate 25%. Under the supplied terms, the founder receives the $300,000. The company receives no proceeds from that payment.
In the separate new-issue case, the buyer holds 30 divided by 150, or 20%. The founder holds 60% and the associate 20%. The company receives the $300,000 under those assumed terms. That money is not automatically a personal payment to the founder.
The two cases start from the same original table. Do not apply the new issuance after the existing-share purchase unless that combined transaction is actually proposed. The percentages each add to 100%, but that check alone cannot tell you which transaction was intended.
Solve for the intended percentage
Suppose the parties instead want the new buyer to hold 25% through a new issuance. Starting with 120 shares, the required number is 40: 40 divided by 160 equals 25%. Issuing 30 cannot produce that result under these assumptions. The founder's 90 shares become 56.25%, and the associate's 30 become 18.75%.
This calculation fixes only the count. It does not preserve a price per share, establish fair value or authorize issuance. The parties still need to agree on the economics and obtain the appropriate reviews and approvals. Do not silently assume that changing from 30 to 40 shares leaves the proposed cash payment unchanged.
For a mixed transaction, create separate rows for existing shares bought and new shares issued. Name the recipient of each payment. Then recompute the final denominator once, using the entire proposed sequence. Take changed funding needs to the financing guide and use the due diligence guide to organize the supporting records.
Share the ownership table deliberately
Keep early outreach seller-blind; an ownership table can expose the owner and practice even without a street address. Obtain the buyer's signed NDA before identifying disclosure. Time any staff or associate involvement around their needed role, applicable duties and adviser guidance, rather than treating a draft share count as permission for a general announcement. The confidentiality guide develops access planning.
Summary
Write the share movement before calculating the percentage. Keep the denominator and payment recipient visible beside the result. Bring unresolved rights to the appropriate advisers rather than inferring them from share count. Use the buyer process or seller process to plan the next review, or book an intro call.
Frequently asked questions
Why do the same thirty shares produce 25% or 20%?
An existing-share purchase leaves 120 total shares, so 30 divided by 120 is 25%. Issuing thirty new shares creates 150 in total, so 30 divided by 150 is 20%.
How many new shares create 25% in this example?
Forty new shares. The total becomes 160, and 40 divided by 160 is 25%. This count does not set the cash price or authorize the issuance.
Does the founder receive the payment in both cases?
No. The supplied existing-share sale pays the founder. The separate new-issue case pays the company. Neither assumption should be carried into a real transaction without checking its terms.
Does share percentage alone establish equal voting rights?
No. The example expressly assumes one equal class. Delaware's cited statute illustrates that classes can have different rights; applicable documents and professional-ownership law require separate review.
Sources
Retrieval dates appear beside each source. Figures retain their stated observation years; retrieval does not make older data current.
- Investor.gov: Stock · Retrieved
- Delaware Code: Section 151 · Retrieved