Did you know there are different ways to bring in a new shareholder to your agency?

You want to bring one of your gun employees in as a shareholder into your agency, but you don’t really know how.

It’s a question that we have heard a lot lately – so we’ll give you a little bit of insight as to why there is not just ‘one way’ to do it.

Here are 2 main questions to ask yourself before you make this huge decision:

Why are you bringing them in?

The first thing you need to know is WHY.

Why do I want to bring this person in as an owner into my agency?

• Do I want to retain a top performing staff member?

• Do I want to plan for the future?

• Do I want to exit or retire, and I need someone to take over from me?

• Am I looking to expand?

• Do I want my staff to work as hard as me by giving them ‘skin in the game’?

As you can see, there are many reasons why you’d want to bring someone into agency ownership – and of course there are different legal mechanisms for each scenario.

You will also need to determine what motivates your staff members, as not everyone is motivated by the same things you are. Whilst you think they might want ownership, they may not want the headache and are more interested in extra cold hard cash. We’ll go into more about this question in our next blog.

Am I ready to give up any control or day-to-day decision making?

This is one of the first questions we ask Principals when they come to see us and 90% of the time they are surprised we have asked ‘are you ready to give up control’. The reason they are surprised is that they assume that when they bring in a new shareholder, that shareholder would then have the same rights as them (but relative to the percentage they are buying in at).

This is not always the case! You can allocate shares with differing rights. Usually you would have rights to capital (on sale), income (dividends) and voting (decision making). If for example you wanted to retain a top sales person, and they are mostly motivated by money, you could look at giving them income only shares – meaning you retain 100% ownership and control, and only give up some income when dividends are paid out.

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Key Takeaways

Work out what is motivating you and your staff and think really hard about whether you are truly ready to give up any form of control and decision making – it is your baby after all.

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Your Next Steps

Thinking about bringing a key employee in as a shareholder in the next 12 months? Book a FREE 10min call with us today to discuss your options.

Don’t miss our next related blog on ‘Whether Giving Away Ownership in Your Agency is the Right Call’ (matching what motivates your employees against rewarding them) contact us today.

Frequently Asked Questions (FAQ)

• What should I consider before bringing an employee in as a shareholder in my real estate agency?

  The two most important starting points are understanding clearly why you want to bring them in — whether for retention, succession, expansion, or other reasons — and honestly assessing whether you are ready to give up some level of control or decision-making.

• Does bringing in a new shareholder mean they automatically get equal rights to me?

  Not necessarily. Shares can be structured with differing rights across capital, income, and voting, so you can tailor the arrangement to suit your specific goals without surrendering full control.

• What if my top employee isn't actually motivated by ownership?

  Not everyone wants the responsibility that comes with being a business owner. Some staff members may be more motivated by increased income than equity, so it's worth understanding what actually drives them before structuring any deal.

• What are some common reasons agency principals bring employees in as shareholders?

  Reasons vary widely and include retaining top performers, planning for the future, setting up an exit or retirement strategy, expanding the business, or giving key staff "skin in the game" to drive performance.

• What is an income-only share structure and when would it make sense?

  Income-only shares entitle the holder to a share of dividends but no voting rights or capital on sale, making them a useful option when you want to reward and retain a high-performing employee financially while retaining full ownership and control of the agency.

Kristen Porter – Partner, Realgate Legal

Kristen Porter is one of the Partners at Realgate Legal. With over 20 years of legal experience and dual degrees in Law and Commerce, Kristen brings a rare blend of legal expertise and commercial insight to every matter. She is a trusted advisor to business owners and agency leaders across Australia, helping them build profitable, legally-sound businesses.

Known for her practical, no-fluff advice, Kristen specialises in real estate agency law, corporate, and privacy law and regularly presents at industry events. At Realgate Legal, Kristen leads a team committed to making the law clear, actionable, and always aligned with your business goals.

Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.