.png)
.png)
Private company share sales may include a provision relating to a possible future sale of those shares to a third-party within a predetermined period. In that event, the original shareholder may receive a proportion of any enhanced price
It is not uncommon for private company share sales between shareholders to include a provision such that if in the future there is an outright sale of the company’s shares to a third party at an enhanced price during a predetermined period the exiting shareholder will be compensated with a proportion of the enhanced price received by the remaining shareholders.
We wondered whether readers thought it was possible for such a provision to be built into the buyback agreement of a purchase of own shares from a retiring shareholder-director which would otherwise qualify for “capital treatment” under condition A of CTA 2010 s 1033.
Alternatively would the provision be regarded as proceeds in the form of a “contingent right” which not being cash could jeopardise “capital treatment”?
If readers consider “capital treatment” would not be jeopardised we wondered whether any additional...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
