Private company shares are increasingly sold in secondary transactions, and the company’s involvement is unavoidable.

Transfer restrictions. The company’s charter, shareholder agreements and option plans typically require board consent, and grant rights of first refusal and co-sale rights. A sale in breach is void under most agreements.

Company concerns. Holder count thresholds triggering reporting obligations; the price set in a secondary becoming a reference point for valuation and option pricing; disclosure of confidential information to prospective buyers; and selection among employees seeking liquidity.

Securities law. The seller needs an exemption. Resale exemptions have conditions on holding periods and on the manner of sale, and the seller may be deemed an underwriter in some circumstances.

Information asymmetry. An employee selling without access to financial information, to a buyer who has it, raises disclosure questions for the company and for the buyer.

Tender offers. Company-sponsored liquidity programs offered broadly to employees may constitute tender offers with disclosure and procedural requirements.

Practical structures. A periodic company-run liquidity window with defined eligibility, a set price supported by a valuation, and consistent treatment, which is far more manageable than case-by-case consents.