The Basics of Shares and Shareholder Transactions

corporation is an entity owned by individuals whose interest is for profit in the business that the corporation is engaged in. Each corporation divides the ownership in terms of shares to its shareholders. Shares are represented by a certificate attesting the unit of ownership not just in corporations, but even in limited partnerships and mutual funds.

Each share represents a fraction of the business and the shareholder becomes a part owner of the business. This is true for both private and public corporations. However, shareholders own a share or shares of stock but not the corporation, per se.

Shareholders enjoy certain privileges in a corporation depending on the class or kind of stock owned. Generally, the shareholders have the right to dispose of their own shares by selling them. They also have the right to vote on matters concerning the corporation, when called for. They can participate in the nomination of the directors, given some set of qualifications that have been earlier identified.

Shareholders can also initiate transactions that can affect the owners and employees. There may be transactions that do not involve financial considerations. However, for shareholder transactions that can include financial valuation, the services of a qualified business or commercial law group is necessary.

These transactions can involve buy/sell agreements, private placements, stock options, shareholder buyouts, and other valuation transactions. The best resource to assist in this area is the legal expert service that will make sure that the shareholders’ interest is well considered and protected.

The roles of shareholders in a corporation may be varied. However, it is generally normal for every shareholder to freely transfer or sell his shares. This, however, may have some restrictions depending on the nature of the business and on the prior agreements as part of the corporation policies mandated by its board of directories.

When these complications and considerations arise, the best thing to do is to get the service of the legal experts in the field. Whatever shareholder transactions are involved, with a qualified legal service provider, the issue can be managed for your full satisfaction.

All documentation and policies affecting a shareholder’s decision can be checked by the legal service provider. This way, it can be assured that all the necessary legal steps and considerations are covered before completing the shareholders transaction.

For the broader challenges of conducting cross border communications, share voting, corporate governance, executive remuneration, among other shareholder transactions, the guidance and advice of a corporate law service is indispensable.

With the legal perspectives taken into consideration in making decisions, shareholders can expect that the complete information and processes are available for proper implementation of the decision.

Legal firms and services can also assist in cases when shareholders would decide for the dissolution of the corporation that would result to withdrawal of investment. Legal guidance is important to undertake the smooth dissolution process avoiding conflicts among or between shareholders, if such will arise.

These issues will be handled by the experts and shareholder transactions can be put to final implementation without the hassles and pressures of documentation preparation and other legal processes.


15 March 2012