How does one of five directors hand back their shares?

How does one of five directors hand back their...

Didn't find your answer?

Hi

Five directors/shareholders each with a 20% stake. One director is leaving and will hand back his shares to the company - no buy back or money paid. How does this need dealing with? Obviously companies house will be informed, but does the remaining 4 directors each get a split of the 20% or can they just sit as issued but not allotted, owned by the company? Maybe for distribution at a later date?

Many thanks in advance.

Replies (5)

Please login or register to join the discussion.

By johngroganjga
11th Jan 2014 06:54

If he is reconciled to giving them up without payment let him gift them to the other shareholders. A purchase by the company for no consideration would be much more trouble and would achieve nothing that a simple gift would not achieve.

Thanks (0)
avatar
By User deleted
11th Jan 2014 11:59

John ...

What about CGT on gift? (with possible holdover). Possible employment-related securities implications?

Thanks (0)
By johngroganjga
11th Jan 2014 12:39

I was taking as read that any gains would be held over. But if the shares have no value, as the terms apparently agreed strongly suggest, there will be no gains need ing to be held over, and any employment related securities issues will be of no consequence.

Thanks (0)
avatar
By M.E.Bhayat
16th Jan 2014 14:27

One of the Directors hand back his shares to the company

One of the director wants to hand back his shares  to company without any money paid  or given anybenefits in kind. It seems to me that there is no value left over in the company concerned otherwise the leaving director will not hand back his to the company without any payment ett or  buy out of his shares.I want to know whether the leaving director has been forced by other directors or shareholders him to leave the company without any compensation in kind? It could be possible in small private limited companies, that the majority of directors tend to gang together and force the director toleave the company for  the underperformance  or for some other reasons to leave the company.The leaving director doesn't want to  litigate for his share of the company because there is no value left in the company.This bring us to second question what sort of treatment should be given to these shares whether it should be allocated to other shareholders and the directors. This could be dealt in two ways either allocating these to other holders in proportion to their holding in the company or to reduced the issued share of the company by passing special resolutions at the board level and approved by the shareholders in specially arranged meeting of the shareholders.

Thanks (0)
Stepurhan
By stepurhan
16th Jan 2014 16:49

Second question is only question

@ M E Bhayat

Your second question is the one that has been asked and answered. Unless the OP acts individually for the director that is leaving, in which case they have a potential conflict of interest issue, they should not address your first question at all.

It may well be that the director that is leaving has been forced out by the other 4 directors and 80% shareholders. It may even be that the nil value on the shares is as a result of this. Even assuming that the OP is in a position to know either way, that is none of their business. The company is their client and all they need to concern themselves with is dealing with the transaction correctly. Indeed, if they were to take up arms on behalf of the departing director, they would be acting against their client's interests. That cannot end well for the OP if the remaining directors sought to make an issue of it.

Thanks (0)