Legal Question in Business Law in California
We have an S Corp in California. One of our stockholders wants to leave and forfeit his shares. Can the company sell their forfeited shares to another party or do the existing shareholders now own the forfeited stock?
Asked on 3/24/17, 10:37 am
1 Answer from Attorneys
You would have to look first to your corporate bylaws. They should cover how a departing shareholder's shares are handled. In the absence of a provision in the bylaws, the shares would be returned to the corporation and become unissued authorized shares. The corporation could then distribute them to the remaining shareholders, or sell them to a new investor.
Answered on 3/24/17, 12:38 pm
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