NSW Selling shares in a Ltd Pty company

[He2396]

A few month after I joined a startup a few years back, the ceo made an offer to me to buy shares in the company which I took and bought some. Since then the company has gone through seed funding and valuation rounds. But it doesn't look like we are going to be acquired or have an IPO anytime soon. What options do I have if I want to sell my shares and leave the company?

 

[Rob Legat - SBPL]

Do you have a shareholders agreement in place? And, what type of shares do you hold?

 

[He2396]

Do you have a shareholders agreement in place? And, what type of shares do you hold?

Yes, I do. They are Fully Paid Ordinary Shares.

 

[Rob Legat - SBPL]

Okay, then you'll need to consider the terms of the shareholders agreement as to how you can sell them. Shareholders agreements often have a mechanism where, for example, all share sales have to be offered to existing shareholders as a right of first refusal, time frames involved and so on. You generally can't just sell to anyone.

 

[He2396]

Okay, then you'll need to consider the terms of the shareholders agreement as to how you can sell them. Shareholders agreements often have a mechanism where, for example, all share sales have to be offered to existing shareholders as a right of first refusal, time frames involved and so on. You generally can't just sell to anyone.

Thanks for your prompt answer. Yeah. I found something under Pre-Emptive Rights. I have to notify the company and specify the sale price.

Now, my question is how do I find the fair value of the company? The last valuation that I’m aware of goes back a couple of years ago. We also went through another round of funding which has been suspended because of the recent market conditions but I don’t know the exact details.

 

[Rob Legat - SBPL]

Difficult to answer and not something that qualifies in the realm of 'legal advice'. You'd be wanting to engage an accountant or a business valuer to look at this, but the effect of the current market constrictions and their uncertain future would make the process very difficult to impossible. Odds are it will be conservative, so you might find its more worth your while to wait it out.