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Padre J Roulston

Legal issue with buying shares

2 posts in this topic

So I'm hoping that someone here can help me....

 

If a shareholder of a company wants out... wants to sell their shares, but cannot find a buyer, is the company then required to buy the shares or is the shareholder stuck with them?

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Hi Padre,

Usually there is a shareholders agreement which stipulates how value would be assessed. Often this is 3x or 5x returned earnings depending on the business.

I can tell you that the majority of the time these shareholder agreements are only a factor in determining value and not a binding contract as there existence would suggest. Ultimately, unless there is a clause forcing a buyout the shareholder is usually stuck with the shares or has to find a buyer for themselves.

I am assuming this is a privately held company, if it is public simply drop the asking price, take a hit, and you should find a buyer on the open market.

Cheers and good luck,

Hawk

Padre J Roulston likes this

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