Quitting as shareholder

As co-founder with one or more other shareholders, you have two basic choices, with an important proviso* and at least one possible exception** (see below): either (i) sell your shares to another shareholder or to a third party (subject to potential pre-emptive rights or rights of first refusal in favor of other shareholders); or (ii) propose voluntary liquidation of the corporation to the other shareholders. The articles of incorporation, by-laws or a shareholders agreement in many co-called closely held corporations (entrepreneurial with small no. of founders who perform most functions, not listed etc.) contain rights of first refusal in favor of other shareholders if a founder wants to sell his or her shares. Accordingly you might have to offer your shares first to the other shareholders on the applicable terms before being able to sell to a third party. Liquidation would require at least a simple majority vote of shareholders at a meeting subject to a potential higher majority if provided in corporate documents or a shareholders agreement. I don't believe filing a DTF-17.1 form is required upon leaving shareholding, but I consider it would be useful to check the "No" box to the question, "Are you a responsible person ?", to have dated documentary evidence of leaving. *The proviso: your sale must be in compliance with US Federal and NY state securities laws. Hopefully an exception would apply in these circumstances, i.e. an exemption from the general requirement to register with the SEC (such as Rule 144A which may permit sale of certain qualtities under applicable conditions such as a temporary holding period). **One possible exception at least: sale or other transfer of shares might be temporarily restricted in corporate documents in connection with share issuance. NY law is general strongly disfavors such restrictions as against public policy, but it is not inconceivable that temporary restrictions for some good reason justified by particularly compelling circumstances might be upheld. Accordingly consulting a lawyer who can review the documents is highly advisable for your protection.