If you are a shareholder wanting to sell your shareholding in a private limited company, there are a number of options open to you. In this article, selling my half of a limited company, we take a look at the methods involved and assess these options.
Free Initial Telephone Discussion
For a free initial discussion on how we can help you sell your half of the shares in a company, get in touch with us today. We will review your situation and discuss the process involved in a clear and approachable manner. Early expert legal assistance can help you avoid making mistakes, saving you money and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.
How do I sell my half of a limited company?
There are three ways in which you are able to sell your shareholding in a private limited company:
- Selling shares back to the company
- Selling shares to an existing shareholder
- Selling shares to an interested third party
In some instances, the company’s articles of association set out a specific procedure for the sale of shares and so should be read first.
Selling back to an Existing Shareholder
If the company is not in a position to purchase your shareholding you may wish to approach existing shareholders who are known to the company and are aware of the company’s assets and liabilities. You may find that this alleviates the need for extensive due diligence.
Selling to a Third Party
If you are unable to sell your shareholding to the company or to an existing shareholder your final option would be to consider selling your shareholding to an interested third party.
Selling back to the Company
You may find that selling your shareholding back to the company is the easiest option as it is often difficult to find a third party buyer that is acceptable to the company in the time frame that you hope for or a similarly a third party buyer who is willing to pay the share purchase price without the need for extensive due diligence.
See our related article for more detail on this.
Initial Considerations and First Steps
Valuation
Before the shareholding is sold it will need to be valued. If your company has a shareholders agreement in place there is usually a mechanism agreed for calculating the value of the shareholding as well as details of who will carry out the valuation.
If there is no such agreement in place we can refer you to an accountant who is experienced in carrying out valuations of private limited companies and can help limit the potential for friction and disagreement between yourself and the purchaser.
Satisfying Due Diligence
Potential buyers may find it necessary to appoint solicitors and accountants to carry out due diligence checks on the company before completing the sale to ensure that the company is sound and present minimal risk for the buyer. We can assist you in gathering and presenting all of the necessary information required to satisfy the due diligence process.
Share Purchase Agreement
The main document that governs the sale of shares in a private limited company is known as the share purchase agreement. The terms and complexity of the agreement for the sale of shares will vary depending upon the nature and circumstances of the transaction but it will typically be a lengthy document addressing indemnities and warranties. We can assist you in drafting the share purchase agreement together with making any necessary amendments during the negotiation process.
Other Procedural Formalities
There are a number of other procedural formalities that will need to be adhered to such as:
- Disclosure Letter
- Completing your Stock Transfer Form
- Requirements for HMRC
- Notifying Companies House
How we can help
We have a proven track record of dealing with business sales. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact our Corporate Solicitors
It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.
To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
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