If it is not stated in the agreement of the shareholders or in the articles of association of the company to do otherwise, shareholders can transfer shares to anyone they want. However, this is only acceptable for companies that are listed on the stock exchange and does not suit private companies with lesser shareholders.
If shares are being sold to anyone, the shares might end on the hands of the competitors of the company or even transferred to someone that the shareholders cannot eventually work with.
To prevent this from happening, shareholders may draft on their Articles of Association restrictions regarding share transfers and these may include agreement offering the shares first to the existing shareholders or the company itself. Offering shares to the company gives it a chance to buy the shares back if it is legal and avoids the hassle of the shareholders to look for funds in order to buy the offered shares when the company can actually purchase them.
The seller is not always given the freedom for the pricing of shares. The company and shareholders may base the price under an independent valuation if that price is lesser than what is set by the seller, but the seller can withdraw the sale if he does not agree with the value. If the company or the shareholders cannot or are not willing to buy the shares, shares may be offered to outsiders, but the condition remains that the price should be the same as the price offered to the shareholders and the company.
There are also instances when the sale of shares is automatically triggered. This happens upon the death of a shareholder, when the shareholder stops working for the company, has filed bankruptcy or suffers from mental illness.
It should also be considered that outside purchasers might want to buy all of the shares offered. That is why shareholders should also take to mind the extent of the shares to be sold. Since various restrictions are essential for the transfer of shares, a properly and legally drafted shareholders agreement should be in existent.
This helps in protecting the interests of the shareholders and the company and avoid working with people they never imagined working.
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