Forcing a shareholder to sell
Should there ever be scenarios where a shareholder is forced to sell or “give up” its shares?
While this is not a frequent approach, there may be scenarios contemplated in the Shareholders Agreement where a shareholder is forced to sell their shares, such as the following:
- in the event of a Takeover Bid, were the bid recipient gives a Compulsory Sale Notice to other shareholders and conditional upon the completion of the transaction;
- in the event that, under the Family Law Act, the Succession Law Reform Act or the Divorce Act, a Court orders the transfer of ownership or control of the shares to the spouse or a third party; and
- in the event that a shareholder is considered an inactive shareholder (e.g. death or disability).