When a major shareholder leaves a publicly traded company, the value of the company’s stock may fall. An investor’s departure may signal trouble to other investors, causing them to sell their shares, which could further reduce the value of the company’s stocks.
If you want to remove a shareholder, you first must decide if the shareholder is leaving the company voluntarily or involuntarily. For involuntary removals, the shareholder will usually need to have violated the shareholders agreement or company bylaws before they can be forced out of the company.
A shareholder can sell or give away shares to anyone unless the company’s articles impose an effective restriction, or the shareholder has agreed not to transfer them or to deal with them in some other way in a binding contract.
Stockholders can always vote with their feet — that is, sell the stock if they are unhappy with the financial results. Their selling can put downward pressure on the stock price.
Gift shares to the company
The shareholders could gift their shares back to the company, for no payment or consideration. Since these shares are a gift, the company need not comply with the formalities required to purchase its own shares. All that is necessary is a stock transfer form to transfer legal title.
Shareholders who do not have control of the business can usually be fired by the controlling owners. … Although an at-will employee can basically be fired for any reason so long as it is not an illegal reason, having cause to fire a shareholder often helps solidify the business’ legal position.
In general, shareholders can only be forced to give up or sell shares if the articles of association or some contractual agreement include this requirement. … The shareholder may have a claim against the company or the other shareholders if they can show that they have been unfairly treated.
Shareholder(s) with at least 5% of the voting capital can require the directors to call a general meeting of the shareholders to consider a resolution overruling the decision. … Shareholders can take legal action if they feel the directors are acting improperly.
Most brokers charge you for every certificate you sell, but how much depends on the value of your shares. For example, if you sell shares worth £10,000 you may get charged 1% (£100) to sell them. But if you sell another £10,000 the charge may reduce to 0.5% (£50).
When should you sell a stock for profit?
There are generally three good reasons to sell a stock. First, buying the stock was a mistake in the first place. Second, the stock price has risen dramatically. Finally, the stock has reached a silly and unsustainable price.