The closing documents necessary to effect the transfer of shares of a corporation from the vendor to the purchaser include: Authorizing Resolution of Corporation, Resolution of the Corporation re transfer, transmission of shares, cancellation of the existing share certificates, and issuance of new share certificates in the name of the purchaser.
The Authorizing Resolution of Corporation is a resolution whereby the Directors authorize the execution of the Purchase Agreement and authorize the President of the Corporation to sign all necessary documentation to give effect to the transaction.
The Resolution of Corporation re Transfer is a resolution whereby the Directors of the Corporation authorize the transfer of shares from the selling shareholder(s) to the new purchaser.
The Transmission of Shares is a document that states that the existing shareholder(s) irrevocably transfers his or her shares to the purchaser.
The Share Certificate Cancellation and Issuance effects the cancellation of the share certificate of the vendor and the issuance of the share certificate to the purchaser.
The closing documents are the Resignation of Vendor (or nominee of the Vendor) as Director and Officer, the Resolution of the Shareholders Electing New Directors, Consent to Act as Director, and Resolution of the Directors appointing new officers.
The Resignation of Vendor as Director is a document that is signed by the Vendor, which states that he or she resigns from the position of Director of the Corporation.
The Resolution of the Shareholders Electing New Directors document is a resolution of the new Shareholders of the Corporation, which confirms receipt of the resignation of the vendor and electing new directors of the Corporation. In a small business, shareholders are often directors as well.
The Consent to Act as Director is required by the Business Corporations Act. When any person is elected to act as the director of a private corporation, he or she must consent to act in this capacity because directors are personally liable for the Corporation’s unremitted trust funds to the CRA.
