Sale of Shares
For the shares to be bona vacantia, it must be established that the shares were beneficially owned (i.e. not held on trust) by the company at the time it was dissolved. If the shares have vested in the Crown, the Treasury Solicitor will dispose of the shares, either by way of sale or disclaimer, as soon as possible. If the shares are sold, the Treasury Solicitor must obtain the market value for the shares.
Depending upon the date when the company was dissolved, it is possible that it can be restored to the Register of Companies, and the share holding would automatically re-vest in the restored company. If restoration is possible, before making any decision as to disposal, enquiries may need to be made of the former members of the dissolved company as to whether or not there is any intention to restore the dissolved company.
In the situation where the dissolved company owned shares in another live company ("the issuing company") the Treasury Solicitor will either disclaim the shares under the statutory power of disclaimer contained in Section 656 of the Companies Act 1985, or sell the shares if they have any value.
In the case of a sale, if the issuing company is quoted on the Stock Exchange, the shares will be sold through stockbrokers.
If the issuing company is a private unquoted company, the Treasury Solicitor's normal practice would be to firstly offer the shares either to the former members of the dissolved company, or back to the issuing company.
The purchaser will be required to make the necessary enquiries to locate the Share Certificates. If the Share Certificates cannot be traced, the purchaser will be responsible for making any necessary Statutory Declaration as to the enquiries which were made, and dealing with any enquiries or requisitions raised by the issuing company, and paying any fees demanded for the issue of duplicate Share Certificates.
Before any disposal of the share holding is considered, the advice of the Inland Revenue, Capital Taxes Office, as to the value of the share holding, will be obtained.
If an offer is made to sell the share holding, it will be on the basis of the value of the share holding, subject to a minimum price of £500. In addition to the agreed purchase price, the purchaser will also be required to pay a contribution of £250 towards the Treasury Solicitor's legal costs, plus VAT and disbursements.
The purchaser will also be responsible for preparing the necessary Stock Transfer Form for execution upon behalf of the Treasury Solicitor.
The subsequent registration of the Transfer Form will be a matter for the purchaser to attend to. The Treasury Solicitor will be unable to offer any assistance with regard to the registration of the Transfer Form, or dealing with any enquiries or requisitions raised by the issuing company. The purchaser will also be responsible for paying any fees due for registering the Transfer Form. The Treasury Solicitor gives no express or implied representations or warranties regarding the shares, or their transfer to the purchaser.
In order for this matter to proceed please provide replies to the following enquiries:.
- Are the shares quoted on the Stock Market?
- Please forward the original Share Certificates if they are in your possession, or any information you have as to their whereabouts.
- Please provide a copy of the Share Register of the issuing company.
- Please provide details of any dividends which were declared by the issuing company during the preceding 3 years, and details of any dividends that are payable to the Crown as bona vacantia, since the date of dissolution.
- Please provide a copy of the last 3 years accounts of the issuing company.
- Please provide a copy of any restrictions on the transfer of shares that are contained in the Articles of Association of the issuing company. If there is any requirement that the shares should be offered to existing shareholders at a price to be agreed with the Board of Directors, or assessed by the company's auditors, the purchaser will be responsible for obtaining that agreement or assessment.
- If the shares are to be sold back to the issuing company a warranty will be required.
All the requirements of Chapter VII of the Companies Act 1985 relating to an "off market purchase" by a company of its own shares has been complied with, and that the purchase is made out of distributable profits of the issuing company, as defined in the Companies Act 1985, and in accordance with Section 162 of the Act.
The Treasury Solicitor will not exercise the power of a shareholder by voting at a company meeting, or appoint a proxy to vote upon his behalf. This is not a course of action that is open to the Treasury Solicitor, since under Section 372 of the Companies Act 1985 only a "member" of the company is entitled to attend and vote at a meeting, or entitled to appoint a proxy to attend and vote upon his behalf. Although the shares may have vested in the Crown as bona vacantia, neither the Treasury Solicitor nor the Crown is a member of the issuing company, and cannot become registered as a member. The Treasury Solicitor cannot therefore exercise any of the powers of a shareholder, but can only dispose of the share holding, either by way of sale or disclaimer.
As you will appreciate from these guidelines, there are a number of steps that will have to be taken before consideration can be given to disposing of the shares in question, and at this time there is no certainty that any offer to sell the shares to you will be made.
Please complete our company restoration form to enquire about restoring your company.
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