Transfer of Ownership Rights for Minority Shareholders

Hopkins Centrich Law, Your Shareholder Oppression Law Firm

Hopkins Centrich Law provides cutting-edge, high-quality, creative legal solutions for minority shareholders in Texas Closely Held Corporations when their rights have been abused by the majority owners. Our attorneys and staff have decades of experience in virtually every aspect of business law in The Woodlands and Texas. We have designed and incorporated businesses, managed their every legal concern, engaged in litigation on their behalf, aided with mergers and acquisitions, managed mergers, acquisitions, and sales.

Hopkins Centrich Law knows Texas business law. We are uniquely positioned to help shareholders when they have ample cause to believe their rights are being violated. When we work with a client, our sole focus is on them. We take advantage of everything technology has to offer in order to optimize how we work. That gives us more time to spend with you, more time to understand the issues, and more time to negotiate and prepare for trial.

We get that no one wants to contact a law firm unless they feel they absolutely have to. When they do, it almost always means that ‘things have reached a head.’ The attorneys and staff of Hopkins Centrich Law understand what you are going through. We will make the process understandable; you will know what is happening with your case every step of the way, and you will never have to track us down for answers.

What to Do If You Think Your Minority Rights are Being Violated

First, do not believe anything you read online, or listen to someone who tells you that the Texas Supreme Court did away with Shareholder Oppression lawsuits. The Court merely limited some of the basis for bringing a Shareholder Oppression action. There are still many avenues to relief available, particularly where the majority shareholders have made decisions that are not In the best interests of the business.

Don’t wait. If you think your shareholder rights have been trampled on don’t hesitate to call. Don’t hope that things change, don’t let a matter fester, don’t try to solve the problem yourself through emails and letters and not-so-calm conversations. Contact us. The earlier you do, the better, there are deadlines for every legal action. The longer you wait, the fewer your legal options.

Your Options When Your Right to Transfer Ownership Are Blocked

If the majority owners in a closely held corporation block a minority shareholder's proposed transfer of their shares, there are some potential options:

• Review transfer restrictions - Carefully review the company bylaws, shareholder agreements, right of first refusal provisions, and other governing documents to understand the basis for the block.
• Request waiver - The minority shareholder could request the majority owners waive any transfer restrictions or consent requirements that are blocking the transfer.
• Offer right of first refusal - If that right exists, the minority shareholder could officially offer their shares to the majority owners first before seeking a third-party sale.
• Seek partial transfer - The minority shareholder may request approval for a partial transfer of some of their shares if a complete transfer is blocked.
• Negotiate release of restrictions - The minority shareholder could try to negotiate with the majority owners to release restrictions on share transfers.
• Litigation - As a last resort, the minority shareholder may sue to overturn unreasonable transfer restrictions that amount to oppression or breach of fiduciary duty.
• Request buyback - If available, the minority shareholder could invoke buyback/redemption rights forcing the company to purchase their shares.
• Petition for dissolution - In extreme cases, blocked transfer coupled with other oppression may justify petitioning for judicial dissolution.
• Offer incentive - The minority shareholder could propose incentives like offering a right of first refusal in future transfers to induce the majority owners' consent.