How can a minority shareholder exit the company?
A minority shareholder generally has four exit routes: (1) requesting the company to repurchase the shares where statutory grounds exist — five consecutive profitable years without dividend distribution, merger or division or transfer of principal assets, expiry of the business term, and similar; (2) transferring the shares to other shareholders or to a third party, subject to the other shareholders’ right of first refusal; (3) a capital reduction; and (4) petitioning for judicial dissolution and liquidation where the statutory conditions are met. Agreeing an exit mechanism in the shareholders’ agreement at the outset is by far the lowest-cost route.
