TRANSFER OF SHARES
Share owners can transfer or
sell their shares and the rights that go with them. This is also called "rights
attached to the shares".
Published by Zoom Startups
on November 10th, 2021.
Transfer of shares must conform to any conditions or
restrictions that apply to a corporation's shares and their transfer; directors
could have to approve all transfers of shares. Individuals can purchase shares
not previously issued by the corporation. This is known as "buying shares
from the treasury". Persons can also buy shares from an existing
shareholder and have the corporation register the transfer. This must be done according
to the terms set out in the articles of incorporation. If you are considering buying the shares of a
private company, it is a good idea to get expert advice.
One of the benefits of transferring shares
in a private corporation is that the ownership of the corporation can be easily
transferred by the purchase and sale of shares. If shareholders of a privately
held corporation do not want to own a part of the corporation any longer, their
shares can be sold to an individual or an entity such as a corporation or a
partnership. Our business
expert can assist with the transfer of your shares
if you are ready to sell.
In privately owned corporations, when transferring
shares, shareholders must adhere to the restrictions and conditions that are
set out in the corporation’s Articles of Incorporation and which may also
contain restrictions
relating to share transfers. Restrictions can apply to
all transfers or sometime to specific cases, such as transfers between spouses
or other family members. Shares can usually be transferred to both individuals
and entities, including partnerships and corporations. It is prudent to contact a professional to help you
conclude what restrictions may apply to your situation regarding the transfer
of shares.
Common share transfer restrictions include who can buy or sell shares
or how many shares can be transferred. One of the requirements is existing
shareholders must agree to the transfer and a requirement that a shareholders’
resolution favouring the transfer be approved. Share transfer requirements and restrictions
in privately held corporations can be established for several reasons, but the
most common is that the shareholders are usually also the directors, officers
and employees of the company. In such instances shareholders would be
vociferous about having a say about whom they would prefer to do business with.
As a shareholder whether you are buying or selling you
must take into consideration the impact this transaction may have with regard
to your taxes. The concerns involved in the transferring of shares can be quite
intricate. For advice
and assistance with trade issues, contact our experts at Zoom
Startups today!
-
Tags:Business In Canada, StartUps in Canada
