Problem: A client of ours asked a lawyer outside of wb.group to draft resolutions for a share transfer. An error was made, so the lawyer later tried to “reverse” the transaction with another set of documents, without clarifying whether the first transfer had been intended.
What Could Have Gone Wrong?
- A shareholder was entered into the register of members, even if only briefly.
- This could have triggered unintended consequences such as crystallising a tax event.
- Without proper documentation, the client could not prove the transfer was a mistake.
Our Intervention:
- Identified the legal risk of merely reversing the transaction.
- Ensured documentation recorded the transfer as an error, avoiding recognition of ownership.
- Trained our team to always ask clarifying questions instead of blindly processing instructions.
Positive Outcome:
- The client avoided a potential tax liability.
- The register of members accurately reflected the client’s intentions.
- The issue was resolved factually and transparently, without creating a larger compliance problem.