• Liquidity Options for Owners of Private Companies
  • June 26, 2016 | Author: William F. Miller
  • Law Firm: Pannone Lopes Devereaux & O'Gara LLC - Johnston Office
  • One of the frustrations of being a shareholder of a private company is that, while their ownership stake in the company may have significant value, historically it has not been readily convertible into cash. Since the shares are not registered with the Securities and Exchange Commission they cannot be traded in the public markets, and transfers of shares of private companies are subject to federal and state securities laws and often to contractual prohibitions on transfer under shareholder agreements. In many cases, shareholders had only two alternatives: wait until the company goes public or, more commonly, is acquired by another company.