As an employee or director of a company, you are usually free to sell shares in the company without retiring. However, the company's articles of association, a shareholders' agreement, or your employment contract might require you to hold a certain number of shares or place restrictions on share sales. This might mean that it is only possible to realise your investment when you retire.
It is now becoming more common for the new owners of a company to require the former shareholder who was also an employee/director of the company to remain with the business for a certain period following completion. This has a number of advantages from the new management's perspective: it gives them a hand-over period; allows them time to learn about the business from the previous owner; and provides continuity in terms of customers' and suppliers' perceptions. However, there are tax implications for a shareholder who sells his shares but continues to be involved in the company.
If you are a partner in a partnership, your ability to withdraw capital depends on the partnership agreement. Usually, capital can only be withdrawn on retirement.
