How do you transfer ownership of shares?

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I run a private limited company in Wales, and we have run into a bit of uncharted territory concerning shares. A colleague and I have been in the business for almost 20 years, but now she is keen to retire permanently. As she will no longer be working for the business, she would like to transfer ownership of her share in the company over to me. How does one go about doing that? Is there a particular procedure I must follow? Thank you for your help.

Answers

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A stock transfer form must be completed in order to transfer the ownership of limited company shares from one person to another, provided there are no restrictions in articles of association - i.e. pre-emption rights of existing shareholders and the director’s power to authorise a transfer.

The following details will be required on this form:

  • Full company name and registration number
  • Name and address of current shareholder
  • Name and address of new shareholder
  • Quantity and class of transferred shares
  • Amount paid or to be paid for the shares
  • Stamp Duty to be paid (if the sale is more than £1,000)

This form does not need to be sent to Companies House but it must be sent to HMRC is there is any Stamp Duty to pay. The new shareholder should pay any Stamp Duty to HMRC when the form is filed.

Both parties should retain a copy of the form and a share certificate should also be issued to the new shareholder. The company must retain a copy of both the transfer form and the share certificate. The director is responsible for updating the company’s statutory register of members to reflect the transfer.

a year ago
 

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