Private Company buys back 25% shares from shareholder. Remaining shareholders 51% and 24% unable to find new investor and buyer for the 25% shares decide to sell the company and assets - what happens to the 25% bought back by the company? - Who gets the benefit?
2007-03-15 21:27:25 · 2 answers · asked by James B 1 in Business & Finance ➔ Other - Business & Finance
What if the remaining shareholders decide to wind up the company, what happens to the shares then?
2007-03-15 22:58:49 · update #1
Nothing = there is no '25%' ...
The guy who sold his 25% got paid by the Company, so the Shares have been 'cancelled'. The two remaining share-holders now own 1/3rd (33%) and 2/3rds (67%) of what is left.
When he sold up, the whole of the Company would have been valued and he would have agreed a price. For example, say the Company was calculated to be worth £4 million. When he sold his 25% he might have agreed £1m (or a bit less - very few Companies could afford this without having to sell some assets such as stock, cars, buildings etc. so often he would have to agreed less than 1/4 if the Company is to survive)
Anyway, if he got the full £1m then the Company is now only worth £3m OK ?
If the Company is sold as a 'going concern', or liquidated and it's assets sold off, for more (or less) than £3m then the two remaining share holders will get the benefit (or loss)... after all that's the risk the first guy took - if he sold up at an agree price and it turns out the Company is worth more (or less) he gets no benefit (or loss).
2007-03-20 21:10:20 · answer #1 · answered by Steve B 7 · 0⤊ 0⤋
the company
2007-03-15 21:30:05 · answer #2 · answered by Anonymous · 0⤊ 0⤋