Publication date: 18.08.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
In a joint-stock company (JSC), there are indeed specific features regarding the termination of corporate legal relations. Here are some key aspects:
- Shareholder exit: According to the law, there is no shareholder exit procedure in joint-stock companies, which would allow a person to voluntarily leave the company after receiving compensation for his shares. Instead, the shareholder can sell his shares to other persons or buy them back from the company at the expense of his own funds.
- Exclusion of a shareholder: JSC also does not have a procedure for the exclusion of a shareholder. This means that a shareholder cannot be forcibly expelled from the company without his will.
- Termination of corporate relations: Termination of corporate legal relations in a joint-stock company usually occurs due to the termination of ownership of shares. That is, as long as a person is the owner of at least one share, he remains a shareholder and retains all the relevant rights and obligations associated with this status.
- Termination of existence of JSC: When JSC ceases to exist (for example, as a result of liquidation or reorganization), all shareholders will lose their status and the corporate legal relationship is automatically terminated.
Therefore, in order to terminate his participation in the corporate legal relations of JSC, the shareholder must either sell his shares, or in case of liquidation of the company, wait for the completion of the liquidation procedure.
Ways of alienating shares:
According to the legislation of Ukraine, shareholders of a public joint-stock company (PJSC) have the right to freely alienate their shares without the need to obtain the consent of other company shareholders. This is one of the characteristic features of public joint-stock companies (PJSC), which ensures a high level of liquidity of shares. Here is a detailed description of ways to dispose of shares in PJSC:
- Share Purchase Agreement: Purchase and sale is the most common way of disposing of shares. As part of such an agreement, one person (the seller) transfers the rights to shares to another person (the buyer) for a certain monetary compensation. The contract of purchase and sale of shares must be concluded in writing. This ensures legal certainty and the possibility of confirming the fact of the agreement.
- Share Exchange Agreement: An exchange agreement provides for the exchange of shares for other values or shares. It can be an exchange of shares of one company for shares of another or for other assets. It is also concluded in writing. Since the exchange of shares is a specific agreement, it requires a detailed definition of the terms of the exchange, in particular the value of the shares and other conditions.
- Share barter agreement: Barter provides for the exchange of shares for other goods or services, which is not monetary compensation. This may include the transfer of shares for a good or service as defined in The agreement must be in writing and the details of the barter must be clearly spelled out, including a description of the goods or services provided. It should be taken into account that the registration of rights to shares and the corresponding change in the register of shareholders must be carried out.
- Share donation agreement: The donation agreement provides for the free transfer of shares from one person (the donor) to another (the donee). The donation does not involve the receipt of material compensation. Donations of shares must be made in writing and may require notarization, depending on the requirements of specific legislation and company rules.
Preferential right of shareholders:
In joint-stock companies (JSC), in particular in private joint-stock companies (PJSC), there is a preferential right of shareholders to purchase shares sold by other shareholders. This right is granted to protect the interests of existing shareholders and to ensure that they can maintain their percentage of participation in the company. Let's consider in detail the main aspects of this right.
- Procedure for exercising the preemptive right: A shareholder who intends to sell his shares to a third party must notify the company. The notice must contain the conditions of sale and the price of the shares.
- Deadlines for exercise: The preemptive right to purchase shares can be exercised within two months from the date of receipt by the company of the notification of the intention to sell the shares. If a shorter term is not provided by the articles of association, this standard term shall apply. The articles of association may provide for other terms for the exercise of the preferential right.
Question
Are there any limitations on preemptive rights?
Answer
Preferential right applies exclusively to shares of PrJSC and to ordinary shares of PJSC in the case of private placement. For preferred shares, this right applies only if it is determined by the JSC charter. Preferential right does not apply to certain cases, such as: donation, mine, barter. The transfer of shares by inheritance is not subject to a preferential right.
Question
What is the role of the prevailing rights?
Answer
A preemptive right gives shareholders the opportunity to first acquire shares that other shareholders intend to sell to a third party. This right is exercised in proportion to the number of shares already owned by each of the shareholders. The main purpose of the preemptive right is to prevent a share of shares from falling into the hands of outsiders, which could change control over the company or its strategic direction.
Lawyer advice in case of alienation of shares:
When selling shares, legal advice can provide valuable assistance at various stages of the process, ensuring that the transaction is legally correct, safe and meets all legal requirements. Here are the types of legal services during the sale of shares:
Lawyer consultation on legal aspects: Lawyers Online can explain the legal requirements related to the sale of shares, including the rights and obligations of the parties, the specifics of the legislation on joint stock companies and the stock market. If the shares belong to PrJSC, the lawyer can explain the procedure for exercising the preferential right of other shareholders and help with compliance with these requirements.
Legal analysis of the situation and preparation of documentation: A lawyer can draft or review a share purchase agreement to ensure that all terms of the agreement are clearly spelled out and comply with the law. A lawyer will check documents such as proof of ownership of shares, company registration documents, and other important documents.
Due diligence lawyer services : A lawyer can conduct legal due diligence of shares and companies to identify possible risks, such as company debts, legal disputes or other issues that may affect the value of shares or the transaction process. A lawyer can check the legitimacy and financial status of the buyer to ensure that he has the ability to fulfill the terms of the agreement.
Services of a lawyer for legal support of the transaction: the lawyer services online can represent the interests of the client during negotiations with the buyer, ensuring the achievement of favorable terms of the transaction. If disputes or legal problems arise during or after the agreement, a lawyer can provide advice and help resolve conflicts.
The disposal of shares is an important and complex process that requires compliance with legal norms and corporate rules. To ensure the legal purity and efficiency of the procedure, it is important to carefully prepare all documents, take into account the rights of other shareholders (especially in PrJSC) and consult with a lawyer help to avoid mistakes and legal risks. Legal services are an important step in ensuring that the share sale process is carried out correctly and in accordance with the law.
