Can a resigning director claim to en-cash Goodwill of the incorporation?

Question

If a director of a incorporation leaves the company and sells his all shares to other director, can he claim some cash against the goodwill of the company, as he worked to make that company successful?

Answer 1

Well, I wouldn't put it that way. Anytime one person wants to sell his shares to another person, it always involves negotiation but first they should have a valuation of the company done. If the seller claims he worked hard through the years, well he was already remunerated by way of his salary and fees. If there's any goodwill in the company, it will figure in the valuation. If the 2 of them can't agree on a valuation, they might need to bring in a professional or firm to do it. Once a value has been agreed on, it's a simple matter of applying the percentage of shares that's changing hands to the value. Let's say the company is valued at $2m and the out-going shareholder owns 40% of the shares, he would be able to sell that for $800,000.