Can I sign over my LAQC?

Question from Cheryl updated on 1st March 2011:

I have a rental property that is registered as an LAQC with my ex-husband and I. I am trying to cover the shortfall but can not afford to carry on. Can I sign over the LAQC to someone else with no money passing hands and therefore indemnifying myself?

Our expert Mark Withers responded:

There is no reason why someone else can't take over your shares for no consideration. Some of the admin things to consider include.. You will need to resign as a director and negotiate with the bank for any guarantees you have given to be lifted.

The bank will also need to be comfortable with the new shareholder as will your ex husband, the company constitution probably provides him with a pre emptive right of purchase. They should also probably draw up a new shareholders agreement. To remain a LAQC a new LAQC election form also needs to be filed within 60 days of the shareholding change.

To transition into the new look through company rules the company must be a valid LAQC on 1 April. 

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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