Share Receipt on Death of Decedent Shareholder

Contact Neufeld Legal PC at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com

Receiving corporate shares of a private company on the death of a spouse or family member (or due to some other personal relationship) poses an interesting situation for the recipient. For even though the receipt of corporate shares might appear as a windfall, unfortunately it is not altogether straight forward when one is receiving shares in a private corporation, as opposed to a publicly traded company.

The major challenge with privately-held companies is that there is very little, if any, market within which to sell one's shares and there is little, if any, corporate liquidity. As such where there is no preexisting corporate agreement that will liquidate the shares of a deceased shareholder for a determinable price upon that shareholder's death, the recipient will be finding themselves largely at the discretion of the surviving shareholders to facilitate a share buy-out on acceptable terms. And without any true incentive to proceed with the acquisition of the decedent's shares at a reasonable price (due to the absence of a binding legally directive, i.e. an on-point unanimous shareholders agreement), the recipients will in all likelihood get lowballed or simply hold those shares without any interest to acquire those shares or pay any equitable dividend distribution thereon.

For knowledgeable and experienced legal representation in advancing your prospective or current shareholdings, while protecting your position as a shareholder, contact us at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or Chris@NeufeldLegal.com.

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Contact us via email at chris@neufeldlegal.com or call 403-400-4092 / 905-616-8864.