QUESTION
If the shareholder of a close corp wants to sell his shares back to the corp, does the corp have to get approval from other shareholders?
Asked on Feb 16th, 2013 on Corporate Law - New York
More details to this question:
It's a small closely held family corp incorporated in NYS. The pres, who ran it by himself, is deceased and a shareholder wants to sell his few shares. Since no other shareholder wants toi buy them, the corp is willing to buy them back. A NY lawyer they know said that a majority of shareholders must approve this. Is this actually NYS law? And if so, does it also apply if another shareholder bought the shares instead?
1 ANSWER
Michael Stolzar
Generally, the board of directors would have to approve the share buy- back, subject to legal restrictions under state law depending upon the financial condition of the corporation. This is not intended to be legal advice, and is general in nature. No attorney-client relationship exists or is formed by this information. Furthermore, this does not represent the views or opinions of LexisNexis or its affiliated companies.
Answered on Feb 19th, 2013 at 12:43 PM