Advisory shares are a type of equity instrument that are used to attract those who can provide advice and consultation to the company. Advisors can play different roles, for example, advisors who bring in their expertise in a particular domain or area; help with their networks and can introduce potential clients, employees or investors; or assist in scaling up teams or expanding into a new territory. These shares do not confer voting rights, and the holder is not entitled to receive any dividends or other distribution of profits. In India, advisory shares are becoming increasingly popular, particularly among start-ups. This in turn makes it important for founders to understand their nature and workings.
Download and read the article below to know more about advisory shares and the procedure to issue them.