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ARTICLE · 15 AUGUST 2020

Selective Share Buy-Backs – a strategic business move

Madgwicks
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If one shareholder wants to sell their shares, a Selective Share Buy-Back may be strategic for the other shareholders.

AustraliaCorporate/Commercial Law
Tom May OAM
Tom May OAM
Marionne Tolentino
Marionne Tolentino

In brief

If a shareholder wants to leave a company and dispose of their shares, a Selective Share Buy-Back can be a strategic tool available to the remaining shareholders.

What is a Selective Share Buy-Back?

There are times when one or more shareholders in a private company wish to leave and dispose of their shares. This can be done in a number of ways, one of which is a selective share buy-back. This is perhaps most appropriate if a shareholder wishes to leave and the departure is not opposed by the remaining shareholders, and the remaining shareholders do not have the financial resources to pay the departing shareholder a fair price. In those circumstance, it may be that the company itself has sufficient resources to payout the departing shareholder.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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