In general, shareholders can only be forced to give up or sell shares if the articles of association or some contractual agreement include this requirement. In practice, private companies often have suitable articles or contracts so that the remaining owner-managers retain control if an individual leaves the company.
When a major shareholder leaves a publicly traded company, the value of the company’s stock may fall. An investor’s departure may signal trouble to other investors, causing them to sell their shares, which could further reduce the value of the company’s stocks.
Major Shareholder Exit
When a major shareholder sells a large number of shares, it may cause the value of the company’s stock to fall, because stock prices are determined by the supply and demand for the stock and the sale of a large number of shares creates a sudden increase in supply.
They have various rights which include the appointment of the company’s director, auditor, to voting rights and having a say when the company goes insolvent, right to access financial records, right to sue for wrongful acts, right to vote, right to attend the AGM, and right to transfer ownership.
The answer is usually no, but there are vital exceptions.
Shareholders have an ownership interest in the company whose stock they own, and companies can’t generally take away that ownership. … The two most common are when a company gets acquired and when it has an agreement among shareholders calling for forced sales.
Australia: Shares can be transferred to a third party, without the consent of the owner of the shares. … The deed administrator did not have the written consent of the shareholders and so sought the Court’s approval pursuant to s444GA for the transfer of those shares.
If the rights to shares have been breached, then you can forfeit those shares by informing the shareholder of your intent. In circumstances such as this, the former shareholder is likely to lose all rights from the shares and is unlikely to be entitled to any amount if the forfeited shares are then sold.
The forfeiture notice must:
- be sent to the registered shareholder of the shares or to a person entitled to it by reason of the registered shareholder’s death, bankruptcy or otherwise;
- request payment of the call and any accrued interest by a date that must be 14 days or more after the date of the forfeiture notice;