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There are three of us in CC who own a property. Split is…

There are three of...

There are three of us in CC who own a property. Split is 60/30/10. Can the 30% shareholder sell shares without consent of 60% shareholder. The money in the account covers the outstanding bond so for technical purposes the property is paid up.

Lawyer's Assistant: What state are you in? And have you consulted a local attorney?

In the Republic of S.A.

Lawyer's Assistant: Has anything been officially filed? If so, what?

No only making enquiries.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Not really.

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Answered in 1 hour by:
1/17/2018
Freddie Lombard
Freddie Lombard, Attorney
Category: South Africa Law
Satisfied Customers: 2,820
Experience: Practicing attorney and conveyancer with 16 years post article experience.
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Hi I'm Freddie,

Welcome to Just Answer. Thank you for your question. I am reviewing it now and will post a reply here ASAP.

Regards

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The short answer is usually "no" - unless there is an association agreement that will allow such a sale.

Section 37 of the Close Corporations Act reads as follows:

37. Every disposition by a member of a corporation of his interest, or a portion thereof, in the corporation, other than a disposition provided for in section 34, 35 or 36, whether to the corporation, any other member or any other person qualifying for membership in terms of section 29, shall be done-

(a) in accordance with the association agreement (if any); or

(b) with the consent of every other member of the corporation:

Provided that no member's interest shall be acquired by the corporation unless it has one

or more other members.

Section 34 deals with the disposal of the members interest of an insolvent member.

Section 35 deals with the disposal of the members interest of a deceased member and section 36 deals with the disposal of a members interest or the cessation of membership by an Order of a Court.

So, in your case, any member, be it the 60% owner or the 10% owner can only sell their interest with the consent of ALL the other members. Usually, the founding statement or the association agreement will also state that any member must first offer their interest to the other (remaining) members in the event that he/she wants to sell their interest.

I hope this answered your question.

I know it will take an extra minute of your time to rate my service, but if you do not rate it, I do not get paid by the website so I would really appreciate it if you would be so kind as to rate my service positively. Feel free to ask further questions here on this topic at no extra cost if you need more information.

Regards

Freddie Lombard
Freddie Lombard, Attorney
Category: South Africa Law
Satisfied Customers: 2,820
Experience: Practicing attorney and conveyancer with 16 years post article experience.
Verified
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Thank you so much for the positive rating. I hope I can be of assistance to you again in the future.

You may request me personally.

http://www.justanswer.com/law/expert-fwlombard1/

Regards

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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

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