Is it possible to resign as Shareholder?

[Nextstore]

Hi,

We just registered new company, of three member, I as director & 450% shareholder AND two shareholders of 200% and 350% respectively. the shareholder with 350% has just resigned due to his personal reasons, we are confused, what should happen to his 350% shares in the business? especially that the company is new, not yet in operation, he just resigned few hours before the CIPC complete the registration, now that the documents & shareholders certificates got delivered to us today, what must we do? is he supposed to have his certificate even if he is no longer the shareholder? or is it possible to reverse the registration so that he can be removed as the shareholder? somebody help.

Type of Business: (Pty) Ltd
No of Shareholders: 3, (450%, 350% and 200% shares each)
Resigned Shareholder: 350%.


Thank you.
Marumo

[BusFact]

You can't resign as a shareholder. You have to sell your shares to someone. However in your case if you don't have any signed paperwork to say that he was a shareholder in the first place, then maybe he never was.

In any event, this is messy. Deregister this company and start again properly.

[CLIVE-TRIANGLE]

Hi Nextstore

I assume your percentages are actually number of shares? Percentages by definition should add up to 100%, whereas yours add up to 1,000%.

All that you need to do is to request from the person who is no longer part of the scheme, a document transferring his shares to the remaining shareholders, in a ratio that you two agree on. Alternatively, he can transfer them to the company (in other words the company does a buy-back).

If you select the option to transfer to the remaining shareholders, then you simply issue share certificates to yourselves, for those shares, and cancel his.

If you select the buy-back option, then you merely cancel his share certificate and those shares go back into the unissued shares pool.

The share transactions are private matters and do not need to be registered by anyone, they must however be recorded in the register of shares and transfers that the company (you!) is required to keep.

However, make sure that you have a transfer document signed by the departing shareholder.

If you need help with this, send me a private message.

[Cheryl_Mac]

Even though he resigned as a director, he would remain a shareholder until such time as he signs a transfer form transferring the shares to the remaining shareholders.