In some instances, selling shares in a company is an advantageous move for an individual or a business, because the sale of the shares provides revenue that may be invested elsewhere. To sell shares of a company properly, you should formalise your plans through a letter of intent, also known as an expression of interest letter.
Write the contact information for yourself and the intended buyer.
Write "RE: sale of shares" as your subject line. You may be more specific if you like, detailing the name of the company involved or the share type.
List the date, such as "DATE: Oct. 22, 2010."
Write an introductory paragraph in which you briefly outline the purpose of the letter (notice of the intent to sell the shares). Make reference to any previous correspondence you have had about the sale of the shares, including the dates on which those correspondences occurred and the names of the parties involved. State that the rest of the letter will list the details of the sale terms.
Define who is meant by "purchaser" and seller." This is not necessarily evident through your contact information. For example, you may address the letter to one person who represents an entire organisation, and the organisation is legally the buyer. Indicate every shareholder involved in the sale.
List or describe the specific shares you intend to sell.
Detail the terms of the sale. This is the most complex part of your letter. It includes items such as how the sale will be financed, who will handle legal representation (if applicable), conditions under which you may withdraw from the agreement and whether you wish the sale to be confidential. Clearly label each term just as you would in a formal contract.
Explain the cost of each share. If you have not yet reached a sale price with your buyer, indicate that the purchase price is to be negotiated. If possible, state the minimum amount you will accept per share so the buyer has some idea of what the share cost will be, but be clear that the actual price is to be determined. This does not obligate you to a price but provides a rough starting point for negotiating the final purchase amount.
Provide the date by which the sale should be completed. State that you may put the shares up for sale again if the buyer indicated in the letter does not follow through by this date.
Write a short closing paragraph that tells the buyer how to reach you with questions or concerns and invites the buyer to sign the sale agreement.
Provide a formal ending salutation like "Cordially" or "Sincerely" and sign your name. Below this, leave labelled lines for the signature of all parties and the dates for the signatures.
Remember that a letter of intent does not necessarily bind you legally to a sale. Whether a letter of intent acts as an initial contract depends largely on how it is worded. Treat the letter as a gesture of good faith and leave the formal contract separate.
Tips and warnings
- Remember that a letter of intent does not necessarily bind you legally to a sale. Whether a letter of intent acts as an initial contract depends largely on how it is worded. Treat the letter as a gesture of good faith and leave the formal contract separate.