Company Shares

[johnt5293]

Hi everyone,

I'm looking for advice regarding arm chair shareholders...

The basics are as follows;

I work for a small company, that used to be rather large many years ago. At one point it employed around 1000 people.

The main industry that the company was involved in has almost ceased, and so the company refocused on one of the side lines of the business, and for the past 30-40 years this is what it has been in business for.

There are now only 12 employees, but 17 shareholders.

The shares were issued to family members 'back in the day', but only 3 of them actually contribute anything to the company.

Some efforts were made to try and buy these shares back a few years back, but none of them wanted to sell (happy to have a cheque sent every year obviously).

Some of the shares have been 'passed' down, some are still retained by their original owners...

Basically, is there any way of getting these shares back?

The company needs to move forward, and needs new investors to do so. But it's hard to see how any body will want to put money in, and then share the profits with people who have no real interest in the company...

Thanks

John

 

[beasty]

I have shares in a couple of banks

I do not expect to have to go in and work for them

 

[The Resolver]

There are a number of ways to proceed. It needs restructuring funding wise and that may mean issuing new shares under a' rights issue' (subject to where the voting majority lies) , attracting an investor to make an offer for a certain number of shares, etc etc and ultimately the 3 working shareholders to consider resigning if the others do not agree a joint restructuring. I imagine with such an old company there are no bar outs in place should the 3 wish to start afresh. That may be the prospect to most encourage the others to reach an agreement to keep them in the company.

This is an old problem that many long standing family companies suffer from. Its all about expectations. The way to proceed is to set out a plan that is likely to be more in the interests of the non-working shareholders than the present (if this is the case) slow decline ie that smaller shareholdings will earn more and have more value in the future from the bigger cake of a more successful business. You set out two alternate futures with your preferred future showing reasons why it is more in their interest than the alternate of doing nothing.

I act as a company mediator and could assist all of you reach a new way forward if you wish. I work with an accountant who is an expert in company restructuring. You are welcome to call to chat first

 

[jim_price]

The most sensible thing is to sit down with your corporate solicitor or accountant to establish the context and hone in on a preferred option. On the face of it you might consider an improved offer (either from other shareholders or the company itself) to buy the shares, a rights issue which may or may not achieve a dilution of the shareholders concerned, or more "nuclear" options such as winding the company up.

This assumes there is no mechanism in the Articles to achieve what you want and no shareholders agreement.