Private company shareholder exit process checklist
Shareholder exits run through the shareholders agreement, the constitution, CGT, and ASIC. This checklist is for Australian commercial lawyers acting on a voluntary exit, fallen-out partner exit, or forced transfer in a private company.
This is a 12-step checklist for managing a shareholder exit from a private company under the Corporations Act 2001 and the shareholders agreement — covering valuation, drag/tag, CGT concessions, ASIC filings, and mutual release.
The checklist
Review shareholders agreement and constitution
Identify pre-emption rights, drag-along, tag-along, good leaver/bad leaver, and valuation provisions.
Characterise the exit trigger
Document whether the exit is voluntary sale, retirement, death, disability, dismissal, or breach.
Appoint a valuer and instruct on method
Engage an independent valuer and instruct on the method — DCF, capitalised earnings, or net assets — per the agreement.
Run the pre-emption or transfer notice
Issue the transfer notice, run the pre-emption process among remaining shareholders, and diarise the response window.
Consider drag-along or tag-along rights
If a third party is the buyer, review drag and tag thresholds and serve the required notices.
Address employee share scheme and vesting
Check ESS vesting, good/bad leaver treatment, buy-back provisions, and section 83A-105 tax deferral implications.
Apply CGT small business concessions
Assess eligibility for the 15-year exemption, 50% active asset reduction, retirement exemption, and rollover.
Release personal guarantees and directorships
Identify guarantees, directorships, and signing authorities. Obtain releases from banks and landlords.
Draft the share sale agreement
Prepare the SSA with purchase price, warranties, restraints, and completion mechanics.
Update the ASIC register and share register
Lodge Form 484 to update members within 28 days and update the company share register and share certificates.
Finalise mutual release and restraint
Execute a mutual release between the exiting shareholder and the company, including confidentiality and restraint of trade.
Complete handover and post-completion matters
Return property, update banking, notify clients and staff, and archive the exiting shareholder’s files.
When this checklist applies
Use for every private company shareholder exit — professional firm partner buy-out, founder exit, or disputed exit.
Common pitfalls
- Missing the pre-emption window under the agreement
- Not applying CGT small business concessions before completion
- Forgetting to release personal guarantees — continuing exposure
- Missing the 28-day ASIC Form 484 lodgment
- Weak warranty and restraint drafting — disputes post-completion
Run this checklist on a real matter
Quillio drafts share sale agreements, runs the pre-emption timeline, and checks CGT small business concession eligibility on a live matter. See /practice-areas/commercial-lawyers or start a free trial.
General guidance for Australian private company shareholder exits. Adapt for trusts, unit trusts, and public unlisted companies.
Use this checklist on your matter.
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