Sale Of Shares Agreement With Possession In King
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FAQ
Many people wonder whether it is possible to write their own shareholders' agreement or whether a solicitor is required. We believe that it is quite possible to draw it yourself, provided that you use a good template as a basis (such as our own).
The articles of association and shareholders' agreement may also specify that existing shareholders have the right of first refusal when a shareholder wishes to sell their shares. This means the shares must be offered to existing shareholders before they can be sold to anyone else.
Basic key to this – the Binding Agreement Date is placed on the document (whether it be the offer or the counter offer) that is signed by both the buyer and the seller to create the contract.
Unless the articles of incorporation of the company impose an effective restriction or the shareholder has entered into a legally binding agreement not to transfer or otherwise deal with the shares, the shareholder is permitted to sell or donate shares to anyone they so desire.
Selling Shares: Without a shareholder agreement, shares are generally transferrable unless restricted by the company constitution. The other shareholders may have pre-emption rights, meaning they get the first option to buy your shares before you can sell them to an external party.
So, how could a shareholder be forced to sell their shares? The law does allow this in certain circumstances. However, shareholders can still oppose it when they believe companies are violating their rights.
A shareholder cannot typically force another shareholder to sell their shares unless there is a contractual obligation entitling them to do so. For example, if there is a provision enabling such a sale in the company's Articles of Association, Shareholder Agreement or another valid contract.
We have 5 steps. Step 1: Decide on the issues the agreement should cover. Step 2: Identify the interests of shareholders. Step 3: Identify shareholder value. Step 4: Identify who will make decisions - shareholders or directors. Step 5: Decide how voting power of shareholders should add up.
