Shares purchase question

[BenJacobs]

A co-director has asked me to sell him my share of a limited company, which I'm happy to do. We've agreed the price. What happens next? Is there a share sale agreement involved? Is this a lengthy document and lengthy process? I'd have thought it to have been a standard share issuance form? Any advice and guidance appreciated. Thank you

 

[Scalloway]

The share sale agreement is up to you two. For the avoidance of dispute it would be better to have one,

You need to complete a stock transfer form.

https://www.informdirect.co.uk/shares/how-to-complete-a-stock-transfer-form-in-10-steps/

 

[Clinton]

You can do everything on a handshake if you wish! And then submit in due course to Companies House.

But if you want to do it properly and safely (!) for all parties then you need to pass a special resolution and you need to get a lawyer to draw up a sale agreement. You might even want to consult an accountant with respect the tax implications for the party who's selling shares.

Don't forget stamp duty.

 

[Blaireau]

A share sale agreement would be wise to ensure that the transaction is documented and capture any indemnity/warranties clauses, thus will serve to protect both the buyer and seller.

Will you declare a divididend prior to the share sale or will you sell a portion of the profits along with the shares to the buyer? You may wish to consider a minimum net assets value!