A shareholder wishes to leave the company. What are the procedures?

A shareholder does not usually cease to be a shareholder simply by resigning. To leave the company, a transaction must typically be carried out concerning the shares they hold.

Depending on the circumstances, the departure may take the following forms:

• by selling or transferring its shares to another shareholder;
• through the sale or transfer of its shares to a third party;
• by the repurchase or purchase by agreement of its shares by the company, when the applicable legal conditions are met;
• as part of a corporate reorganization;
• by another operation allowing the shares in question to be disposed of or cancelled.

Before proceeding, it is important to review the company's articles of association and any shareholder agreements. These documents may include provisions for restricting share transfers, a right of first refusal, a pre-emption right, buyback or purchase mechanisms, or other rules governing a shareholder's departure.

It is also necessary to determine the value or price of the shares and the payment terms. Depending on the situation, a valuation of the company or the shares may be required.

The transaction may have legal, tax, and financial consequences for the departing shareholder, for the other shareholders, and, in the case of a buyout or acquisition by the company, for the company itself. These consequences should be assessed before choosing the transaction structure.

Once the terms are determined, the necessary documents must be prepared and the required corporate approvals obtained. Depending on the transaction, this may include preparing a share sale or transfer agreement and the appropriate resolutions.

Following the transaction, the securities register, the shareholders' register, and other relevant corporate documents and records, including the transfer register where applicable, must be updated. Documents relating to the transaction should also be kept in the minutes book.

Any required updates to government or regulatory authorities must also be made, where applicable. This may include updating information about individuals exercising control over the company when a shareholder's departure results in a change in this regard.

In summary , a shareholder's departure generally requires a transaction involving their shares. Before proceeding, it is necessary to verify applicable restrictions, determine the terms of the transaction, assess its consequences, and prepare the necessary corporate documents, including any required updates to the relevant authorities.