Questions & Answers
Selling shares in a company to an existing shareholder
I am a shareholder in an LLC DED company in the UAE. We are 3 shareholders. I would like to transfer/sell my shares to an existing shareholder in the company. However, the third shareholder refuses to sign on any documents regarding the transfer.
Is this applicable? What could be done and what is the appropriate procedure?
Dear Sir/ Ma'am,
Good day!
First, we need to call for a board meeting for all the shareholders giving them 15 days' notice time.
If the shareholders do not come, we will file a shareholder's resolution after each meeting, and then, file it in the court asking for transfer of shares to the third party shareholder because one of the shareholders is not cooperating.
For further assistance, please feel free to contact us via phone or email.
Thank you!
Hello,
As per your query and it is an LLC company, then there must be 51% local shares of the company and the rest share percentage must be divided among 3 shareholders.
As you have the pre-emption right which will be as per the Memorandum of Association of the company, you have the limitation of time period for pre-emption.
Since the third party is not agreeing to sign the document, then a Board Resolution should be passed with the majority of the shareholders with the agenda of share transfer.
It's better if you can notarize the document with the majority partners signing the meeting. The majority is 75% of the capital. And in your case, it can be 83% of the capital.
Then you can file a case for transfer of the shares or try to amend the contract with the said resolution. However, if the minor shareholder challenges it in the court, then it might create a problem.
So it is better to file a case with the shareholder resolution.
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