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Hi all, if a shareholder of an unlisted public company is wanting to sell their shares what information is the company obliged to provide in relation to the financials and performance of the business to allow the shareholder a reasonable chance of selling their shares?

last year



First place I would look is at the shareholder's agreement if there is one. The shareholder's agreement may place requirements on financial reporting, but it would almost definitely have provisions relating to the sale of shares.

If the company has not prepared financial reports (or at least not made them available to shareholders) - shareholders who hold at least 5% of the company's shares can direct the company to prepare financial reports and provide them to the shareholders who make the direction. Take a look at section 249A of the Corporations Act for more information.

It may be an idea to engage a lawyer to assist you with this - especially if the company doesn't play ball.


Thanks Adam, appreciate you taking the time to answer, cheers


Correction on my last post.

Take a look at s.294A of the Corporations Act.

Hi Paul,

The shareholders in a private company will generally have the right to a copy of the financial statements from year to year, once completed by the accountant. They won't necessarily get a copy without asking (normally a director as well, in which case they should always receive a copy, along with access to general accounts information/management reports).

You may find the shares can only be sold to an acceptable new shareholder - so the continuing shareholders have a level of control on who can come into the business.

Depending on the scenario, it may be worth getting an independent valuer involved, as the intangible asset of Goodwill may be a big issue. Everyone will have their own view of its value based on their position in the valuation.

Party selling out may find value and peace of mind in talking to a corporate lawyer, just make sure they have all appropriate information at hand. If there is a shareholder’s agreement, that will often take precedent, though some areas of the Corporations Act cannot be over-written.



Hi Todd, thanks for taking the time, much appreciated, cheers Paul

An unlisted public company is no different to a listed public company except that it doesnt list its shares for sale in a share market. the shares are traded privately, and as Todd has said the other shareholders get a say in who buys them.

I believe that the company must provide copies of financial statements and audit report on demand by the shareholder. But I think the documents that must be provided are limited to the financial statements, notes to the financials and auditors report. I dont think that shareholders have the right to demand internal management reports or the underlying financial data. I would hope that the audit and the integrity of the financial reports would be enough to give the potential buyer confidence in what he was looking at......

hope this helps

Good comments above.

Unlisted pub companies are required to publish their audited financial reports annually and these must be lodged with ASIC and are therefore available to the general public via the ASIC company search function for a fee.

The other things to consider, ASIC will also show the company’s registered auditor details so you could approach that way; further it will hold the companies constitution which will operate in consultation with any shareholders agreement. These two documents will detail what rights the company has granted over base statutory to shareholders for access to accounts, management etc. They will also detail the share sale process ie is there pre-emption processes in place which require shares to be offered to existing shareholders before going wider to general public.

Hope this is of some help Paul.

I’ve have quite a bit of experience in this particular area if you have something very specific you want to run past.

Hi Paul,
The Corporations Act makes provision for a number of disclosure requirements for unlisted public companies generally. Unlisted public companies are required to prepare an annual report that includes the following:
1. A directors’ report;

2. A financial report; and

3. auditor’s report.
For a small proprietary company, a directors’ report and financial report are only required when directors holding at least 5% of the votes in the company direct the report to be issued.

The annual report must be distributed to its members (including shareholders) within the earlier of 21 days before the annual general meeting or four months after the end of the financial year.

The financial report must include the financial statements of the company including but not limited to a balance sheet, profit and loss statement, cash flow statement and a statement of recognised income and expenses. This report should also include notes to the financial statements and a directors’ declaration about the statements and the notes.
A shareholder may request the company send them a full annual report for a financial year not earlier than the one before the financial year that the request is made. This report would help the shareholder be in the best position to assess the performance of the company in order to sell their shares.

It is important to note that there are certain share sale disclosure requirements under the Corporations Act that a seller of shares must adhere to. These requirements include the seller issuing a prospectus or offering an information statement with the offer to sell the shares to the purchaser. Chapter 6D of the Corporations Act outlines these disclosure requirements, noting that there are a number of exemptions to these provisions, for example, if the seller of the shares is not a controller of the company (a majority shareholder or a director) then these requirements do not apply.

Some of the shareholder’s rights can be varied by the company’s constitution or the shareholder's agreement for example. It is important to be clear what these documents specify.

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