When it comes time to Remove a Shareholder from a Company, you should be aware of the processes that are required by law and your company’s specific constitution.
Generally, when removing a Remove a Shareholder from a Company, three main documents need to be drafted:
- Change of Details Form (called a ‘Form 484’) submitted to ASIC to formally record the change.
- Minutes of meeting and resolution to remove the shareholder from the registry.
- A record of sale or disposal of the shares.
This article will provide you with some general information outlining the process. However, we recommend that you seek professional advice suited to your particular circumstance to ensure that you are complying with all the relevant rules and regulations.
Lodging a Change of Company Details Form (Form 484)
A copy of the Change of Company Details form traditionally was available in paper form. However, ASIC has recently changed the process, in that they no longer accept paper lodgements. Instead, to inform ASIC that you are going to Remove a Shareholder from a Company, companies now have two main options to submit the Form 484:
- Using ASIC’s online portal via the company ‘Corporate Key’.
- Using a ‘registered agent’ who can submit the form on your behalf.
Lodgement via Corporate Key
When lodging via the corporate key method, you will need your Australian Company Number (the unique number assigned to your company when you first registered the company) and the company’s Corporate Key. A corporate key is a unique 8-digit number linked to a specific company. A corporate key is like a PIN used to access a bank account and is used to keep your company information secure. Your company has only one corporate key.
If you cannot find your Australian Company Number, you can search for it on ASIC’s company register. If you cannot find your Corporate Key, you can get a new key issued to the email address registered on the company’s records by requesting it.
Lodgement via Registered Agent
Another way to complete to lodge the Form 484 in order to Remove a Shareholder from a Company is to utilise a registered agent to make the change. These agents are certified by ASIC and are responsible for completing the forms appropriately. These agents are usually commercial lawyers or financial accountants.
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Completing the Form 484
To complete the Form 484, you will need to have the following details handy:
- Company Name
- Australian Company Number (ACN) or Australian Business Number (ABN)
- Corporate Key
- Name of person lodging the form
- Telephone number of person lodging the form
- Postal address of person lodging the form
For the shareholder being removed
- If they are an Individual: Full name of person who is being removed
- If they are a Company: Company Name, ACN or ABN, Office address
- Date of the change taking effect
- Share class effected
- Amount of shares being removed
- The amount paid for the shares
For the person who is being assigned the shares of the person being removed
- If they are an Individual: Full name of person who is being removed
- If they are a Company: Company Name, ACN or ABN, Office address
- Date of the change taking effect
- Share class effected
- Amount of shares being removed
- The amount paid for the shares
- If they are held for the benefit of the entity which owns them or if they’re held for the benefit of another entity (like a trust)
Recording the change in the minutes of a company meeting
To formalise the change, and maintain an undisputed record of events, it is recommended that you hold a meeting and record minutes pertaining to the removal of the member and the terms on which they were removed.
Record of Sale
As with any purchase of ‘property’, you should create a formal ‘receipt’ for the transaction which details:
- Sellers details
- Amount of shares sold
- Total sale price of shares
- Date of sale
- Purchasers details
- Amount of shares bought
- Total price paid to seller
- Date of purchase
- Executed by both seller and purchaser and dated
- Important note regarding sale/transfer of shares
Depending on the state of registration, your company may incur ‘stamp duty’ fees on the transfer or sale of shares.
Remember, if you’re ever in doubt – always seek professional advice.
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