Ex-employee trying to reclaim share money
Discussion
What does the share purchase agreement say? I assume that you had a written agreement. If not, what terms did you agree in some other form? Agreements as to shares often include good leaver and bad leaver provisions, but I have the impression that we are not dealing here with anything that sophisticated. If you really did just pay money to the CEO, and if the company is as Mickey Mouse as that makes it sound, then you may be facing a problem.
I had the opposite situation a few (actually more than 10!) years ago- I transferred to a different country , working for the same company; my shares that I had in the UK were sold automatically (as if I had left the company)- which meant that I would have lost out on a lot of bonus shares. So they had to repurchase all of them for me. Glad they did, as they are worth about 2.5 times more now now!
Hope the OP's situation works out ok- sounds a bit dodgy to me!
Hope the OP's situation works out ok- sounds a bit dodgy to me!
Surely to be issuing shares there would, as a minimum, need to be Articles of Association? Would this not have to set out the rules of assigning shares?
Saying that IIRC the AoA can pretty much stipulate anything. I am pretty sure that before listing, our old co had windows of opportunity, these were the only time shares could be traded.
Also whith out a market maker who defines the value of any shares?
Every limited company has a memorandum and articles of association. Articles may be in a standard off the shelf form or may be bespoke. Valuation of shares in an unlisted company is a matter for agreement between the parties, and in many cases there is an agreed mechanism for share valuation by the company's accountants or whatever. The OP's story suggest to me that he has been dealing with a Mickey Mouse organisation and that little or nothing has been written down, but the OP has vanished so we may never know.
Edited by anonymous-user on Tuesday 3rd October 13:37
Okay, I have to agree, there seems to be a fair few educatred guesses about the type of organisation I use to work for. Partly this is why I left after only a year in the role.
It's eight weeks since I left and finally I am getting traction. They finally sent me forms to complete 2 weeks ago. Now they are advising me the CEO will arrange a refund when their lawyer signs the sale off.
I was worried by the lack of response. I do think it is not a priority for them which is fine. I guess there is not a lot I can do about it apart from state my dissatifaction on Glassdoor. I know the COO will be fuming about it if I do.
It's eight weeks since I left and finally I am getting traction. They finally sent me forms to complete 2 weeks ago. Now they are advising me the CEO will arrange a refund when their lawyer signs the sale off.
I was worried by the lack of response. I do think it is not a priority for them which is fine. I guess there is not a lot I can do about it apart from state my dissatifaction on Glassdoor. I know the COO will be fuming about it if I do.
Lostprophet said:
Okay, I have to agree, there seems to be a fair few educatred guesses about the type of organisation I use to work for. Partly this is why I left after only a year in the role.
It's eight weeks since I left and finally I am getting traction. They finally sent me forms to complete 2 weeks ago. Now they are advising me the CEO will arrange a refund when their lawyer signs the sale off.
I was worried by the lack of response. I do think it is not a priority for them which is fine. I guess there is not a lot I can do about it apart from state my dissatifaction on Glassdoor. I know the COO will be fuming about it if I do.
I'd echo Breadvan's concerns.It's eight weeks since I left and finally I am getting traction. They finally sent me forms to complete 2 weeks ago. Now they are advising me the CEO will arrange a refund when their lawyer signs the sale off.
I was worried by the lack of response. I do think it is not a priority for them which is fine. I guess there is not a lot I can do about it apart from state my dissatifaction on Glassdoor. I know the COO will be fuming about it if I do.
What forms did they send you?
If you paid money to the CEO personally, then it sounds like he should have transferred some shares held in his name to you . Depending on how much you paid, stamp duty should have been paid (by you) on that within 30 days, so you may want to question who is liable for any penalties for late payment.
The form was for the transfer of shares back to the CEO.
The HR girl advises me they will send the form to the lawyer along with the stamp duty to finalise matters. I assume I do not have to pay duty but I will not ask them about it unless I see deduction on my payment back.
I should have got it in writting when I purchased the shares. I think I learnt a lesson!
The HR girl advises me they will send the form to the lawyer along with the stamp duty to finalise matters. I assume I do not have to pay duty but I will not ask them about it unless I see deduction on my payment back.
I should have got it in writting when I purchased the shares. I think I learnt a lesson!
Lostprophet said:
The form was for the transfer of shares back to the CEO.
The HR girl advises me they will send the form to the lawyer along with the stamp duty to finalise matters. I assume I do not have to pay duty but I will not ask them about it unless I see deduction on my payment back.
I should have got it in writting when I purchased the shares. I think I learnt a lesson!
Blimey.The HR girl advises me they will send the form to the lawyer along with the stamp duty to finalise matters. I assume I do not have to pay duty but I will not ask them about it unless I see deduction on my payment back.
I should have got it in writting when I purchased the shares. I think I learnt a lesson!
So it sounds like the company may be paying a stamp duty liability that is the CEO's?
Definitely a lesson!
I'll confess to being a little rusty since I left private practice, but for future reference: you can only be written up as the holder of shares in a company's register of members once any stamp duty has been paid. Whilst you should normally be issued with a share certificate, it is the company's register of members that is the definitive document of title to shares, not a share certificate. Notwithstanding that, get a certified copy of the stamped stock transfer form for your records, and ask for some evidence that the previous share certificate has been cancelled.
Also for future reference: the idea of an employee acquiring shares in the company as an incentive is well accepted. However, the idea of acquiring those shares by buying them off the CEO is, shall we say, less well trodden. Ordinarily, employees would acquire brand new shares from the company, so the employee's hard earned cash is benefiting the company, not one of its directors. If you are offered shares in an employer again by buying them off an existing shareholder, ask them why. Also ask them if there are any pre-emption rights on transfer. If you are offered new shares (ie money to the company for 'new' shares), ask them about pre-emption rights on allotment. In all cases, check what happens to the shares if you leave - there are likely to be good and bad leaver provisions which will determine what you get if you leave.
Edited by Europa1 on Tuesday 3rd October 14:55
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff