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One exciting part about setting up a corporation is issuing and distributing shares. You should work with lawyers to ensure that your shareholders have the proper documentation and agreements for their protection and the future safety and growth of your business.
Once the corporation is formed, shareholders are named, and shares are issued, you may wonder what to do if someone wants to transfer their shares. This doesn’t have to be a difficult process if you have the right legal representative to help carry out the transfer. At our law firm, we believe every medical business owner deserves confident and capable legal help when handling matters of shareholders in their medical practice. Contact us today to see how we can help you.
Why Would a Shareholder Transfer Shares?
The following are a few scenarios in which a shareholder may wish to transfer sales:
- They want to sell their shares to raise money quickly
- The shareholder wishes to remove themselves from the business
- They want to use their shares as a gift
- They need to transfer the shares as part of a divorce settlement
- The company needs to adjust the shares as part of restructuring the business
- The shareholder has died
What Steps are There in Transferring Shares in a Private Corporation?
Depending on the value of the shares, transferring them between shareholders can be a simple process or could be quite complex. The shareholder agreement may outline the proper procedure for transferring shares. If these documents lack clarity or do not exist, you may rely on trusted lawyers like those at our law firm for help.
Some of the main steps that usually occur when transferring shares in a private corporation are:
- The individual selling the shares fills out a share purchase agreement.
- They obtain a Director’s Resolution approving the transfer.
- New share certificates are issued reflecting the updated amounts in each shareholder’s name.
- Any additional documents are obtained, such as resignations in the case where the person is exiting the corporation.
Should You Hire Our Lawyers?
Handling matters that come up with shareholders can be one of the trickiest parts of running a private corporation. You should be prepared for questions regarding ownership and transfer of shares by having a detailed, legally sound shareholders agreement in place when you incorporate your business. Our caring and capable legal team can assist with creating these crucial documents and resolve any matters that arise.
When dealing with shareholders who transfer their shares, you may wonder what rights you have as a business owner. Our lawyers understand the nuances of corporate law, and we have spent years protecting doctors and dentists. We know how hard you have worked to get to this point, and we will stand by your side as you face any future challenges, including creating shareholder agreements and dealing with adjusting share certificates. Please reach out to us right away at (438) 805-5515 to discuss your situation and see how we can help.
