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Thread: Donating or Selling Shares to a Trust

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    Donating or Selling Shares to a Trust

    Good Afternoon folks

    I have a shelf company of a client of ours, the shares are to be transferred to the Trust. Is it advisable to rather sell the shares at R100.00 to the Trust (Trust can purchase shares from cash on hand) or would a donation of shares be sufficient?

    I am not sure where I read this once, but the article advised against donating the shares to the Trust under any circumstances?

    Any advise / feedback in this regard would be greatly appreciated.

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    We have a Trust - I was going to answer you but I don't think Im qualified to. My Trust owns two properties, therefore it might be different to shares of a company.
    I will leave it up to the experts, but I would advise you to see a lawyer because Trusts can get very intricate and involved.

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    The directors must resolve on a fair value. If there are assets then I cannot imagine that R100 will cut it. This applies whether it is a donation or a sale.

    That's actually the real issue and only issue.

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    The R100 is a token amount

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    Most likely not. Despite having a new Act since 2012, most people still make a share R1, as if there is a par value share.

    I am guessing here, the authorised share capital is 1,000 ordinary shares with a par value of R1, or 1000 no par value shares, of which 100 have been allotted at R1 each.

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    I read it as R100 for 100% token price for all shares

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