Share Transfer

[The Soup Dragon]

Our main shareholder has agreed to sell some of their shares to two members of staff.
He owns 80% and has agreed to sell the others 10% each. The company has been valued.

We have asked a local solicitor to act on behalf of the company to draw up a simple bog standard sale and purchase agreement ( boiler plate I assume) to facilitate this.

Can anyone estimate how much this should cost?

I nearly fell over when quoted!

SD

 

[Chris Ashdown]

Our main shareholder has agreed to sell some of their shares to two members of staff.
He owns 80% and has agreed to sell the others 10% each. The company has been valued.

We have asked a local solicitor to act on behalf of the company to draw up a simple bog standard sale and purchase agreement ( boiler plate I assume) to facilitate this.

Can anyone estimate how much this should cost?

I nearly fell over when quoted!

SD

What was the charge quoted? With the 80% holder all the power remains with him so basically all you are getting is dividends if he decides to award them. You will also need a shareholders agreement drawn up by your solicitor to protect you as far as possible

 

[The Soup Dragon]

3.5K

 

[DWS]

3.5K

Is that for the shares or the Solicitors fees?

 

[The Soup Dragon]

Solicitors Fees

 

[Newchodge]

The4 main shareholder has 80% and is selling 2 x 10%. Does that mean the new shareholders will get 10% each and the main shareholder will be left with 60%? Or they get 8% each and the MS is left with 64%? Or are new shares being created? Is the solicitor planning to offer advice to the MS about the danger of reducing their shareholding below 75%? Or advise on anything else, such as alphabet shares, or draw up a shareholders' agreement.

Is there an existing shareholders' agreement?

 

[The Soup Dragon]

The4 main shareholder has 80% and is selling 2 x 10%. Does that mean the new shareholders will get 10% each and the main shareholder will be left with 60%? Or they get 8% each and the MS is left with 64%? Or are new shares being created? Is the solicitor planning to offer advice to the MS about the danger of reducing their shareholding below 75%? Or advise on anything else, such as alphabet shares, or draw up a shareholders' agreement.

Is there an existing shareholders' agreement?

Hi Cyndy

Straight forward sale nothing else just the paperwork no new shares being issued. Accountant doing the companies house bit.

 

[fisicx]

3.5K

Shop around. We paid £500.

 

[Newchodge]

Hi Cyndy

Straight forward sale nothing else just the paperwork no new shares being issued. Accountant doing the companies house bit.

If it is absolutely just recording the transfer of the shares I imagine you can get a form from t'internet. You might want to ask the solicitor what they think they are being asked to do.

 

[fisicx]

Or ask @The Resolver - it’s what he does.

 

[The Soup Dragon]

Or ask @The Resolver - it’s what he does.

Oh I thought he just did dispute stuff!

 

[AndEde]

Seems a bit on the high side.

 

[WaveJumper]

Seems very high especially for the "lack of what they are undertaking and not giving advice on:" agree with @fisicx speak to @The Resolver before going any further

 

[Porky]

Just come across this thread, @The Soup Dragon i am failing to see what the big deal is here, as Cyndy @Newchodge commented to deal with the share transfer part it’s just filling out a stock transfer form, the parties paying for the shares from the other, paying the stamp duty and filing the form. Update the revised shareholder register at companies house when you submit your annual statement.

As for a shareholder agreement, well that’s probably a good idea in view of the main holder controlling less than 75% post transfer of share ownership but I wouldn’t think you should be paying more than £500 tops for that. £3.5k looks excessive to me, are they writing the agreement with a quill ?

Good luck

 

[The Soup Dragon]

Just come across this thread, @The Soup Dragon i am failing to see what the big deal is here, as Cyndy @Newchodge commented to deal with the share transfer part it’s just filling out a stock transfer form, the parties paying for the shares from the other, paying the stamp duty and filing the form. Update the revised shareholder register at companies house when you submit your annual statement.

As for a shareholder agreement, well that’s probably a good idea in view of the main holder controlling less than 75% post transfer of share ownership but I wouldn’t think you should be paying more than £500 tops for that. £3.5k looks excessive to me, are they writing the agreement with a quill ?

Good luck

Thanks Porky, seems to me like we might not need a solicitor to be involved at all. My accountant can do the companies house bit I think.

 

[Chris Ashdown]

Thanks Porky, seems to me like we might not need a solicitor to be involved at all. My accountant can do the companies house bit I think.

NO NO NO unless you are a idiot, get the legal side sorted out with the shareholders agreement otherwise you will be crying in a few years on this forum looking for answers

 

[fisicx]

Thanks Porky, seems to me like we might not need a solicitor to be involved at all. My accountant can do the companies house bit I think.

Always use a solicitor! Or @The Resolver

 

[Porky]

@The Soup Dragon Solicitor for an updated shareholder agreement, yourself and/or Accountant for the rest.

As @Chris Ashdown and @fisicx -you will want an updated shareholder agreement for sure as voting rights will have changed on share transfer

Your main shareholder can no longer effectively pass resolutions on their own as more than 75% required to pass future resolutions hence you don’t want issues if you ever come to sell in the future or raise capital for example - sorry that the wording of my reply may have misled you to thinking not to bother updating the shareholder agreement side- good luck

 

[The Resolver]

Oh I thought he just did dispute stuff!

Many of the disputes I deal with resolve with a share transfer the terms of which have been part of the agreement to resolve, .

In this particular case consideration needs to be given to see whether an HMRC employee share scheme can operate and give tax benefit

Whilst a full Sale and Purchase Agreement may not be necessary here, given the seller remains and in control, a short contract over and above the Stock Transfer Form (eg to ensure the seller gives 'title guarantee' to the shares, i.e. confirm there are no charges on the shares for debt and the seller is not in breach to a third party by transferring (e.g. are there any options to other shareholders or is the seller currently the sole shareholder).

BTW @Porky, 75% is all needed for a Special Resolution (for solvent liquidation, change Articles of Association, change Name) not over 75%