Can I be forced to sell shares my husband left me?

LF writes: My husband, an expert in the worldwide tanker industry, formed a company in 1995 with four others. He had prepared the groundwork for the company but died suddenly in 1997. I had not heard from the company until I had lunch with a friend whose husband was also involved in the formation of the company. She asked if I was interested in selling my shares. I was appalled at this approach. Please tell me what my rights are as a shareholder and whether I should get yearly statements from the company. Can they force me to sell my shares, which are a link for me to my late husband?

Answer

As a shareholder you are entitled to receive notices of shareholder meetings and copies of the annual accounts. If you have not received these you should ask the company secretary whether you are registered as a shareholder. If so, ask why you have not been sent the documents and insist on the correction of this oversight. The company secretary should also send you a copy of the firm´s memorandum and articles of association and latest accounts. Find out whether there is a shareholders´ agreement that may contain special provisions on the death of a shareholder. The articles may include provisions covering the sale of your shares. For example, there may be a pre-emption clause stating they must be offered to other shareholders on death or if a shareholder wishes to sell. If you want to keep the shares you inherited from your husband and there are no pre-emption clauses or provisions to that effect in the shareholders´ agreement you cannot be forced to sell. But try to find out why you have been asked if you want to sell - the other shareholders may be selling out in a takeover. When you get the paperwork from the company consult a professional adviser to determine whether a sale is a better option.