Checklist of actions for transfer of ownership (100%

stock) of a US Company 

Sr. Tasks Done?

No. (Y/N)

Ensuring That the Purchaser Is Eligible

1 For example Tax code rules in an S corporation strictly limit the

number and types of shareholders in a corporation. In order to
maintain its S Corp. status, the company cannot have more than
100 shareholders who must be individuals and specified trusts
and estates.

2 Partnerships, other corporations and non-residents are not allowed

to own S Corporation stock. 

Ensure that a proposed transfer complies with these restrictions.

Review any previous contracts which provide for restrictions

on share transfers

3 Most restrictions pertaining to stock transfers can be found in the

bylaws of the corporation or share purchase agreements or
shareholders agreements or investor rights agreements entered into
before the proposed transaction.

Determine the Value of the Stock

4 A selling price or the process to arrive at one might be specified in

any of the previous agreements containing provisions relating to
share transfers.

5 In the absence of such information, the price will be determined and

agreed freely between the buyer and the seller and there can be
many ways to determine the price. Considering that the entire stock
of a corporation is being transferred, in this case, the transfer will
be based on the valuation of the company itself.

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 Whether the Stock Purchase Agreement has been prepared?

6 Once the value of the shares has been determined, a written stock
purchase agreement needs to be prepared, setting out the terms
and conditions of sale.

7 The stock purchase agreement needs to be signed by the seller

and the purchaser and submitted to the company along with the
stock certificates. (Delaware corporations can issue uncertificated
shares also, in which case there will be no stock certificates).

8 If there are a large number of shareholders, the Corporation might

have engaged a Transfer Agent and such agent can provide for a
transfer request form to be filled. An example of such a form can be
seen here. In this case the share transfer form, together with the
stock certificate, if there is one, needs to be sent to the transfer
agent.

Payment of consideration

9 Purchaser shall deliver an amount equal to the purchase price to the

seller by such mode of payment as may be specified in the Stock
Purchase Agreement.

Delivery of Stock Certificates by the Seller to the Corporation

/ Transfer Agent and Delivery of new Stock Certificates to
the buyer

10 Sellers shall deliver to the Corporation or the Transfer Agent the

Stock Certificates for the shares being transferred. The Corporation
or Transfer Agent shall then cancel such shares and issue new Stock
Certificates to the Transferee.

Update the Shareholder lists

11 The Corporation / Transfer Agent shall then update the shareholder

lists in their records.

Since the transfer is for 100% stock, this means that the control of the
corporation is being transferred. In such cases, the Stock Purchase Agreements
can even bear provisions relating to employees, other contracts entered into by
the corporation, property of the corporation etc. depending upon the terms
agreed between the buyers and the sellers.

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© Addictive Learning Technology Pvt. Ltd. Any unauthorized use, circulation or reproduction shall attract suitable action
under applicable law.