Sell Shares

cadman79

Hi guys, hope all is well? 
Very quick question if someone has the answer
I owned shares in a company and i have decided to sell them back due to times we are in. 
i have received a share transfer price etc & agreed to it in writing. Now i understand with the way things are financially that companies are trying to hold on to money as long as they can, but is there any given timescale that they have to pay for these? and can they issue dividend etc without mine been paid for? or they they technically still mine till cash changes hands? 
Cheers in advance for any help 

AnotherJoe

Is this a private company rather than public shares?

cadman79

AnotherJoe said:

Is this a private company rather than public shares?

Hi, 
Yes these are private company shares.. Basically a 20% ownership.. 
Thanks 

bowlhead99

It depends on what you have agreed with them, but if you agree a settlement date where you deliver them the share transfer consent and they deliver you cash, that will be the day the sale 'completes', because up until that point you haven't both given the promised consideration for the trade. You can write a simple one page sale and purchase agreement to confirm when the sale will be effective and what conditions need to be met (e.g. you receive cleared funds, they receive your signed transfer form?.

There is of course nothing to stop them paying a dividend the day after you have surrendered your shares and are no longer a shareholder, so that you miss out and the dividend cash gets split between fewer people and either costs the company less or the other shareholders get more each.  If you are expecting a dividend you will presumably build that into the price you would like to be paid for selling back the shares.

cadman79

bowlhead99 said:

It depends on what you have agreed with them, but if you agree a settlement date where you deliver them the share transfer consent and they deliver you cash, that will be the day the sale 'completes', because up until that point you haven't both given the promised consideration for the trade. You can write a simple one page sale and purchase agreement to confirm when the sale will be effective and what conditions need to be met (e.g. you receive cleared funds, they receive your signed transfer form?.

There is of course nothing to stop them paying a dividend the day after you have surrendered your shares and are no longer a shareholder, so that you miss out and the dividend cash gets split between fewer people and either costs the company less or the other shareholders get more each.  If you are expecting a dividend you will presumably build that into the price you would like to be paid for selling back the shares.

Thanks bowlhead, 
The transfer agreement was basically a cheque would issued by return.. So I returned by special delivery on the 30th of April.. Would this then mean this should be the cheque issue date? 
Thank you 

bowlhead99

If it were me, I would have agreed with them that they shouldn't cancel or redistribute the shares until I had received cleared funds for them, as its not like I don't have a bank account that accepts incoming electronic transfers. Paying in a cheque is just more work for me. They may consider sending a cheque to be more convenient and pretty much as good as paying for them in cash, as if the cheque bounces you can sue them for it. Practically it may take some time, with everyone in lockdown, to physically write and send the cheque.

If you have already signed away your shares and them promised to send a cheque by return, I wouldn't expect you to get any dividends if they happen to pay any during May or beyond (though given current circumstances they may not be doing that anyway, even if they do in other years).

cadman79

Thanks Bowelhead, 
I'm just concerned they will try keep me on the long finger with regard to issuing the cheque... I'm not worried about dividend really as I fear it will be drastically reduced this year. 
Just worried if I'll ever see my money 

AnotherJoe

If they don't intend to pay you then it doesn't matter how they intended to pay - cheque, bacs whatever. Your remedy would be legal. And IANAL but surely until you have the money the shares are still yours?

cadman79

AnotherJoe said:

If they don't intend to pay you then it doesn't matter how they intended to pay - cheque, bacs whatever. Your remedy would be legal. And IANAL but surely until you have the money the shares are still yours?

I would have thought so too... So they have issued me a contract with their offer. I have signed offer and sent back.. The offer was signed by a director.. So surely thats very legally binding 

bowlhead99

cadman79 said:

AnotherJoe said:

If they don't intend to pay you then it doesn't matter how they intended to pay - cheque, bacs whatever. Your remedy would be legal. And IANAL but surely until you have the money the shares are still yours?

I would have thought so too... So they have issued me a contract with their offer. I have signed offer and sent back.. The offer was signed by a director.. So surely thats very legally binding 

A signed offer that's been accepted and your part of the bargain fulfilled, is legally binding on them to do their part. When people go to court about broken agreements, they rely on their paperwork and it sounds like you have it. But the sale isn't final (like buying or selling a house) if both parties haven't signed on the dotted line that the purchase is going to happen, and it isn't complete until both parties have  given their consideration (the shares in one direction and the cash or cheque in the other).  So if you didn't get paid, you haven't sold the shares.

Whether or not they will be paying you tomorrow, or they break the agreement and don't pay you at all, or break the agreement and pay you much later than whatever date is specified in the agreement, or what you had verbally agreed, is not something that we can speculate on, as we don't know you or them or the circumstances.

There is not a lot to be gained by your speculating in public (albeit an anonymous forum) about whether they might delay payment or change their mind entirely and not buy your shares. Either they will and you can get a solicitor on the case to see what rights your agreement gives you, or they won't and it's fine.

Thrugelmir

Is the Company repurchasing them or another shareholder?