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How do I enable fractional shares?
How do I enable fractional shares?

With fractional shares, equity can be represented in the cap table with up to five decimal places.

Support Team avatar
Written by Support Team
Updated over 4 months ago

Introduction

Many companies work with fractional shares (common in Germany and the Netherlands). By using different nominal values per share class, it is possible to reflect fractional shares, but this workaround causes several pain points:

So far, companies have been using nominal values per share class as a workaround for fractional shares. This causes several issues and is error-prone in itself.

We're happy to announce that it is now possible to reflect fractional shares directly in Ledgy.

Fractional shares enable the exercise of fractional amounts of grants, the award of fractional grants, and the issue or transfer of fractional shares. Fractional shares can have up to five decimal places.


Best practices

  • Fractional shares should only be turned on with care. Why?

    • Once fractional shares are turned on, this feature cannot be turned off again.

    • When turning them on, numbers might change a bit due to the rounding working differently after turning them on.

  • Due to this, we made it so that only Ledgy Support or your CXM can turn on fractional shares.


How to enable fractional shares

Fractional shares must be activated by Support.

  1. Please contact us via Support chat or email. Specify how many decimal places you want your shares to have. Up to five decimals are possible.

  2. An account owner must activate support access: Company Settings > General > Danger Zone > Authorize

  3. We will confirm when the activation of fractional shares is completed.

When you go to Company Settings > General > Equity management settings, you will see if fractional shares are activated and how many decimal places your cap table supports.


What changes in your cap table when fractional shares are active?

Once the feature is activated, all amounts in the app can be fractional and have up to five decimal places. From vesting to document templating, from exercising to scenario modelling. Excel imports and exports as well.

Vesting will be calculated based on the selected number of decimal places.

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