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Do you have a shareholders agreement please?
Yes I do
Good. What does it say about disposal?
I must apologies, I am at the office today, the shareholders agreement is actually at home.
Is there something I should look out for?
To see what it says about selling shares or them buying you out
As far as I can remember, I have to offer them back to them, and they can make what ever offer they like, hence the £75k (in fact they started out offering my £13k, £75k was their latest offer) but I don't have to accept their offer. I have always turned down their offers as they have always been very low, in the £20k region. I have always believed that one day they would sell, which I still do believe they will, and when that happens I imagine I am more likely to get something more aligned to their real value.
Does it not say market rate or anything?
not sure, I believe that they dont have to offer me the market rate, only what they are willing to buy them back for.
Ok - can you let me know later
Yes, I will check tonight and then email you?
Of course, just come back to this question
ok, to this page then?
Great, thank you Alex, I will do that this evening.
Hi Alex, apologies for the tardy response, only I had to find the agreement, and then scan and convert to text - both of which took a while to sort. Anyway, done now, please see the following, it is the closest thing I could find to a reference to buying the shares;
not dispose of any of their Shares or any legal or beneficial interest in their Shares unless in compliance with the following provisions of this clause or Clause 16.
In the event of a Shareholder transferring any interest in Shares in accordance with the provisions of this Agreement to any person who has not entered into any agreement with the Shareholders a substantially and effectively the same terms as this Agreement it shall be a condition of such transfer that prior to it being effected the transferee shall have agreed by deed (a "deed of adherence") to be bound by terms and conditions substantially the same as and not materially more or less onerous than those contained in this Agreement and subject thereto with such amendments as the Shareholders may agree in writing. At the request of the Shareholder transferring the Shares or the transferee the Shareholders shall enter into such a deed of adherence
Upon execution of a deed of adherence such transferee shall be deemed to be a party to this Agreement and the transferor shall if it is no longer a Shareholder be released from its obligations under this Agreement save as to restrictive covenants and confidentiality undertakings and without prejudice to any rights and/or remedies that any Shareholder or the Company may have against the transferor in respect of any breach by the transferor of any of its obligations under this Agreement or otherwise prior to such date
Any Shareholder (subject to Clause 11) who wishes to transfer Shares or any interest in Shares ("the Vendor”) shall give to the other Shareholders (“the Offerees*) notice in writing ("the Transfer Notice") No Transfer Notice may be served save in respect of the entire shareholding of the Vendor The Transfer Notice shall specify the identity of the person (if any) ("the Third Party Transferee") to whom the Vendor intends to sell or transfer the Shares specified in it ("the Sale Shares") including the price for the Sale Shares and all other terms offered by the bona fide Third Party (if any) The Vendor shall in the event of a Third Party Transferee having offered to purchase the Sale Shares make a full disclosure of all terms offered by the Third Party Transferee The Transfer Notice shall constitute an offer for the Sale Shares at the price ("the Sale Price") which is the higher of: (1) the price (if any) for the Sale Shares offered by the bona fide Third Party referred to in the Transfer Notice and (2) the price which is agreed upon by the Vendor and the Offerees or, in the absence of agreement such sum as shall be certified (at the request of the Vendor or any of the Offerees within six months of the date of the Transfer Notice) by the auditors of the Company or in the event of the auditors being unable or unwilling to act then by an independent Chartered Accountant (the said auditors or the independent Chartered Accountant is hereinafter referred to as "the Expert" and who shall act as an expert and not arbitrator) to be nominated at the instance of either the Vendor or any of the Offerees by the President for the time being of the Institute of Chartered Accountants as the fair value of the Shares on the date of the appointment of the Expert under this clause as between a willing seller and a willing buyer contracting on arm’s length terms
They can't make you sell them.
What you should do is get the business valued.
Then once you have this you know what your shares are worth
If they want to buy them, then all is well
If they do not - then you can keep hold of them
They need to pay a fair price for them
You can refuse to accept a lower amount and there is nothing they can do about this
Can I clarify anything for you about this today please?
Thank you for this, this is kind of what I thought, which is good. So I suppose my other question is - I assume that given that I have a shareholders agreement, and that 'technically' they cant do anything to change this situation, that my shares are safe until they either sell, or offer something that relates to their value? I have already had a valuation produced by my own accountants, which had them valued at around £160k, which if they knew the reputation of this company, would probably see that that was conservative - good enough for me though, and I would definitely accept this.
Correct they can't do anything outside the agreement
Actually you are in a strong position - if they want your shares, they will have to pay for them!
Otherwise you can sit and hold tight
Great, that is comforting to know, and so if they did anything that was seen to change my situation negatively that would be a clear attempt to penalise me, which wold be viewed negatively by a court?
Can I clarify anything else?
Ok great, that is comforting. In that case I am happy to wait to see what they do, hopfully one day sell.
No, that is all, thank you very much.
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