Am I not entitled to company's Annual Report?


 

Newdiscoverybs Reader

Posted: July 28 2012

I am one of the people who benefited from BEE employee share scheme where large sum was paid in dividends, from that I got convinced by my lawyer to buy 10% shares in a start-up company and I have been receiving dividends but my main concern is that there is no Annual financial report that I receive from the company . Am I not entitled to such report or is my shareholding so little that I should not get information?

 NDBS Answers:

Posted: July 28 2012

Privately owned companies are not obliged to disclose its financial dealings. The owners can make available certain information that according to them will not compromise their operations.  But in the event that the company approach individuals and offer shares or investment opportunity such company subjects itself to the law that governs Public company and is therefore expected to make available to its investors the financial report.  Therefore you need to raise it with your lawyer or the company that you invested in.  Make them aware that you would like to receive detailed information about company’s performance.  In most cases people invest in companies that are not operational, they in other hand invest the money some where else and you get paid from the dividends they received than from direct business operations. 


 


 

 I have been going through the company documents and came across the term 'Cliff Vesting' what does it mean?

Newdiscoverybs Reader

Posted: July 26 2012

 

 NDBS Answers:

Posted: July 26 2012

The process by which employees earn the right to receive full benefits from the employee's qualified retirement plan account at a specified date, rather than becoming vested gradually over a given period of time. Cliff vesting happens when employees are considered vested in an employer benefits plan once they have earned the right to receive plan benefits. Vesting can occur gradually, where the employee becomes partially vested after each X years of service. For example, the employee could be 20% vested after two years of employment, 30% vested after three years of employment and so on until becoming fully vesting.

Source: Investopedia.com 

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