Shareholder exits

FAQ

“We encourage you to seek legal advice before going into business with your partners. This will help to reduce the potential for disagreements in the future or to have in place a mechanism for dealing with disagreements without the need for costly, stressful and risky legal proceedings.”

– Kush Birdi

Why (or when) someone would need this service?

Problems can occur between the shareholders and directors in a private company. You might be a minority shareholder and the majority are exercising their control over the business for an improper purpose, or in a way that is detrimental to your financial interests. Alternatively, the company is unable to make progress due to a ‘deadlock’ between opposing sides of management.

We understand that these scenarios can be detrimental to the business if they are not addressed promptly. We will advise you on your rights and obligations and suggest commercial and practical solutions on how to protect your share in the business and, if necessary, extract your share at the right value.

How can you exit as a shareholder?

There are a number of reasons why a shareholder may wish to exit from a business. Every case is different, and the appropriate legal solution usually depends on your financial objectives, the bargaining position of the parties involved as well as the tax implications for each party. We can help you to negotiate and implement the most effective structure for you.

Common structures include:

  • Share sale to the remaining shareholders at “fair value”
  • Share sale to a new company (newco) for corporate finance purposes
  • Share re-organisations or share exchanges
  • Company purchase of own shares
  • Trade sale of the business in the open market
  • A winding-up of the company (usually as a last resort)

What is the legal process and how long does it take?

There may be different legal requirements to follow depending on the chosen structure. We will keep you informed about the process and estimated timescales that are applicable to your case.  

We will always need to review your company’s articles of association and shareholders’ agreement (if there is one) to understand how the parties’ relationship is regulated.

Why are Grant Saw the best people for the job?

We have a breadth of experience in situations where problems or disagreements occur between shareholders or in the boardroom. Whether you are trying to resolve a long-standing disagreement with your co-owners and cannot see a way out, or whether you just want to understand what your rights and obligations are, we can assist you through the legal process with the aim of a smooth and cost-effective solution.

We also have access to specialist accounting and tax advisors to help structure any deals in a tax-efficient way.

Meet the team

Mario Savvides

Leena Patel

Kush Birdi