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Learn more about Change Company Shareholders

A business includes having a total of three shareholders on the shareholder’s list. To meet this requirement, a shareholder may own as little as one share in the company. If a shareholder intends to transfer its shares to a third party, the share transfer document must be signed, and the company’s board of directors informed of such transfer. It will then be the appointed director’s responsibility to file the revised shareholder’s list with information of the new shareholder taking over the stock. If the Articles of Association of the Company or a shareholders agreement allows a current shareholder to give the other shareholders the first right of choice, then the intention to transfer shares should be made clear to the other shareholders before executing the act without their knowledge.

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How to change company shareholder?

To change company shareholder, the Director shall ensure that the existing shareholder and the new shareholder have signed a written contract. Upon receipt of the contract, the company’s director must prepare the share transfer certificate before the Department of Business Development, also called DBD, to proceed with such a change company shareholder. The shareholders will then respect the following process:

➤ Drafting and signing the formal agreement on the sale of shares
➤ Respect the regulation of the company's article of the association if any specific provision is made to validate the transfer of the share if necessary
➤ Submitted an amendment to the company shareholder list, the company's director should sign this amendment and proceed with such an amendment

What is the share certificate?

Each shareholder must have a certificate issued. The shareholding certificate on the share certificate will display the following:

➤ Name of the company which owns the shares
➤ The number of shares in the enterprise it represents
➤ The number of shares held
➤ If the shares are not completely paid, the sum payable for each share
➤ Name of the shareholder or statement of the bearer 's certificate

What are the conditions to transfer shares?

Section 1133 notes that the transferee remains responsible for the entire amount outstanding on the shareholding of any stock not completely paid up. Remember that once the transfer is complete, no transferor can be held responsible for the unpaid shareholding. If the new owner were unable to settle the unpaid shares, this will end in court. Once this transfer has been noted in the company’s shareholding after 2 years, the transferor can not be held accountable for the unpaid shares. When buying or selling unpaid stock in a company, it is often better to speak to a lawyer about their consequences as a shareholder and a corporation after the transfer of shares and change company shareholder.

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