Why do you want to sell?
You may want to remove yourself from the business for a number of reasons you may be retiring or you may just want to make a profit. Whatever your reasons there are a number of ways to sell your shares in limited company in the UK.
You may want to sell all of your shares or just some of them. There are a few agreements which can make this process easier:
Articles of association
Shareholders agreements
Shareholders agreements
Shareholders agreements are an often-overlooked but important source of protection for small companies. They should be needed for any company with more than one owner, and for partnerships and other kinds of ownership.
A shareholders agreement can cover issues such as transfer of shares and the role of any new members in the company. The role of shareholders may also changes the company evolves and this may affect the nature of any transfer or sale of shares.
And also set out actions based on future events such as
- the sale of the company
- one shareholder buying out another
- third party capital
- sale of assets
- the company being wound up
Articles of association
Articles of association are contracts between shareholders and a company that’s set out how the company will be run.
articles of association or relevance when looking to sell or buy shares because they may set out issues such as
- The Liability of shareholders
- the power role and responsibility of directors in the decision-making process
- the rights of shareholders when it comes to transfer AND payments at dividends
- how voting will work in general meetings and how decisions can be made.
Companies in England and Wales must have articles of association in order to be legally formed.
The articles of association are a public documents where is the shareholders agreements is confidential and can provide roles rights and obligations of the shareholders. Both of these documents work together to protect the shareholders rights and ensure the smooth running of the business.
Selling Assets
Selling the assets of a business is an alternative to selling the shares.
Assets can include Goodwill furniture and it equipments fixtures inventory and investments and they could be sold directly to a new owner.
You may also be sold as a going concern which means that the business retains its existing operations and continues in its existing form after the assets have been sold.
How to transfer shares
Shares can be sold or transferred to other parties. Shares can be transferred to other shareholders in exchange for cash payments goods or services. Another reason maybe to write off debts auto gift shares to friends and family members.
In rare cases a shareholder may gift shares to another person with no payment required simply because they no longer wish to be involved in a company.