Introduction
Fractional shares are a powerful feature in Ledgy that allow for more precise allocation and management of equity. This feature is particularly common for companies in Germany and the Netherlands, where equity structures often require decimal precision. This article explains what fractional shares are, when you should enable them, and how to activate this feature in your account.
Note: Previously, companies used nominal values per share class as a workaround for fractional shares, but this approach caused issues and was error-prone. Ledgy now supports fractional shares directly, eliminating the need for workarounds.
What are fractional shares?
Fractional shares enable companies to allocate equity in fractions rather than whole shares. Once enabled in Ledgy:
You can allow shareholders or equity holders to own partial shares.
The number of decimal places used to represent fractional shares can be adjusted. This means you can decide the level of precision most suitable to your equity plan. For example, you may choose to display up to 2 or 4 decimal places depending on your requirements.
Note: Once fractional shares are enabled, this change is irreversible. Though you can modify the precision of decimal places, fractional shares cannot be fully disabled.
Fractional shares are equity holdings that include decimal places rather than just whole numbers.
What fractional shares enable:
Exercise fractional amounts of grants (e.g., exercise 100.5 options)
Award fractional grants (e.g., grant 1,234.567 shares)
Issue or transfer fractional shares (e.g., transfer 50.25 shares)
Support up to six decimal places of precision
Example scenarios:
Vesting calculations: If 1,000 shares vest over 48 months, each month would vest 20.833333 shares (with fractional shares enabled) rather than being rounded to 21 shares.
Complex ownership structures: When converting between different equity instruments or adjusting for stock splits, fractional shares ensure mathematical precision.
Compliance requirements: Some jurisdictions require precise equity calculations that result in fractional amounts.
When to enable fractional shares?
You should enable fractional shares if for instance:
Your company is based in or operates under jurisdictions that commonly use fractional shares (Germany, Netherlands, etc.)
Your equity structure requires decimal precision for accurate representation
You're experiencing issues or limitations from using nominal value workarounds
You need precise vesting calculations that result in decimal amounts
Your legal or accounting requirements demand fractional precision
Important: Only enable fractional shares if you have a clear business need. This is not a feature to turn on "just in case."
Important considerations before enabling
This decision is permanent
⚠️ Once fractional shares are turned on, this feature cannot be turned off again.
This is the most important consideration. Make sure you genuinely need fractional shares before enabling them, as there's no way to reverse this decision.
Numbers will change due to rounding
When you enable fractional shares, numbers throughout your cap table may change slightly due to different rounding calculations.
How to enable fractional shares
Only Ledgy Support or your Customer Success Manager (CSM) can enable fractional shares. You can request for this to be enabled for your account via our Support chat or email. Account owners must authorise support access first via Company Settings > Collaborators > Grant support access.
Step 1: Decide on decimal places
Determine how many decimal places you need for your fractional shares. Ledgy supports up to six decimal places.
Step 2: Authorise support access
An account owner must authorise Ledgy Support to access your account.
Go to Company Settings > Collaborators
Click the Grant support access button on the top-right
Specify how many days you want to grant access for
Click Confirm
This authorization allows Ledgy Support to make the necessary configuration changes to your account.
Step 3: Contact Ledgy Support
Reach out to Ledgy Support to request fractional shares activation.
Contact methods:
Use the in-app Support chat
Email [email protected]
What to include in your request:
Clearly state you want to enable fractional shares
Specify how many decimal places you need (up to 6)
Confirm you understand this change is permanent
Mention that you've authorised support access
Step 4: Wait for confirmation
Ledgy Support will:
Review your request
Verify support access is authorised
Enable fractional shares with your specified decimal precision
Confirm when the activation is complete
You'll receive confirmation via email or support chat when fractional shares are active on your account.
Step 5: Verify activation
After receiving confirmation, you can verify that fractional shares are enabled:
Go to Company Settings > General
Look for the Equity management settings section
You'll see confirmation that fractional shares are activated
The number of supported decimal places will be displayed
What changes when fractional shares are active
Once fractional shares are enabled, your entire cap table operates with decimal precision.
Affected areas
All transactions:
Grants can include decimal amounts
Exercises can be for fractional quantities
Share issuances support decimal values
Transfers can include fractional amounts
Vesting calculations:
Vesting amounts are calculated using your selected decimal precision
Monthly, quarterly, or custom vesting results in precise fractional amounts
No more rounding during vesting calculations
Document templating:
Generated documents display amounts with decimal places
Variables populate with fractional values
Export formats include decimal precision
Reporting and modeling:
Cap table reports show fractional ownership
Scenario modelling includes decimal precision
Waterfall analysis uses fractional calculations
Excel imports and exports:
Import templates accept decimal values
Exports include amounts with decimal places
All import/export functionality supports fractional amounts
Adjusting fractional share settings
To fine-tune the settings for fractional shares:
Navigate to the equity setup section in the Ledgy app.
Modify the number of decimal places as needed to suit your company's reporting standards or equity allocation preferences.
Keep in mind the following:
You can freely adjust the precision at any time post-enablement.
While you can change the display precision, fractional shares will remain enabled permanently.
Display format
Throughout the app, share amounts will display with your chosen number of decimal places:
2 decimals: 100.25 shares
4 decimals: 100.2534 shares
6 decimals: 100.253456 shares
Even whole numbers will display with decimal places (e.g., 100.000000) to maintain consistency.
Best practices after enabling fractional shares
Review your cap table
After activation, review key areas of your cap table to ensure everything looks correct:
Check vesting schedules to see updated fractional amounts
Review ownership percentages for any changes
Verify transaction history reflects correct decimal precision
Compare totals before and after to understand any rounding differences
Update processes and templates
Adjust your workflows to accommodate fractional shares:
Update internal documentation to reflect decimal precision
Modify Excel templates if you use custom imports/exports
Inform your team about the change and what it means
Update stakeholder communications to explain fractional amounts if needed
Communicate with stakeholders
If stakeholders have portfolio access, they'll now see fractional amounts:
Consider sending a brief explanation of what fractional shares mean
Clarify that the change is technical and doesn't affect their actual equity value
Be prepared to answer questions about why they see decimal amounts