Cancelling shares

Cancelling shares

Didn't find your answer?

A client recently issued 10 £1 Ordinary "C" shares to a new sales director. A few days later it was decided that this was not a good idea and the salary package was adjusted accordingly. The sales director has never paid for the shares. What is the best way of cancelling these shares?
Anil Aggarwal

Replies (1)

Please login or register to join the discussion.

avatar
By AnonymousUser
18th Dec 2005 11:34

you can't unilaterally undo a contract
Hi Anil

It might not be so easy here to simply 'undo' the transaction, just because the client changed his mind.

It depends on the facts of the matter. Was there any agreement, written or verbal? Was the sales director expected to pay for the shares and, if so, by when? Was he ever asked for the money and refused to pay? Has he worked in expectation of getting these shares as a reward?

Based on the answers to the above questions, it may be that the shares cannot be retrieved without the consent of the sales director.

On the positive side, if no agreement was reached with the sales director regarding the shares and he did not rely on any expectation of getting them, then there's an arguament that this could amount to an 'unperfected gift' or a unilateral agreement for which the sales director provided no consideration - which would mean that the gift could be undone (apologies for the technical language, its difficult to write that out sensibly in less that 1000 words!).

Happy to explain further if you wish.

Ray


Ray Levy
Levy & Co, Solicitors
[email protected]
020 7993 8052

Thanks (0)