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How to Transfer Shares?


2021-07-25


 

Transfer to a tax-advantaged vehicle, such as an ISA or a pension plan;

Transferring the shares to a spouse (again, for tax reasons);

Transferring shares to children as part of a tax plan or turning on the keys of the company to the next generation;

A transfer agreement between business partners;

When an existing shareholder dies, his or her shares are transferred to his or her heirs.

Transfer of share in the event of a divorce, separation, or civil partnership dissolution

Simply to free up excess funds for other uses!

As part of a change in corporate structure – for example, the firm becoming a subsidiary or affiliated company of another company.

 These are some of the common reasons for why transfer of shares might occur. Furthermore, before committing to acquire shares, the buyer may want to have a professional appraisal and set out a thorough purchase contract, especially if the sums are considerable.   


Many people assume that the shares are transferable and that there are no special limitations. While this is frequently true, there are a number of situations in which shares cannot be transferred or may only be transferred after following a certain procedure.

 

 

The Transfer Procedure

 

So, we’ve covered some of the reasons as to why a transfer of shares might occur. Now, let’s take a quick glance at the procedure of transferring shares below.

 

The shareholder wanting to sell shares must complete and sign the stock transfer form

Wherever a must, the buyer has to sign on the stock transfer form

In some occasions, if deemed as necessary, the form is sent to HRMC for stamping

The company checks the transfer documents when received

Directors determine whether they should approve the transfer or not

The company will go ahead to update the statutory registers, cancels share certificates, and issues new certificates.

This transfer is sent to Companies House as a part of a confirmation statement later.