Can I gift shares in a limited company?

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Being the old sod that I am, I want to retire and get out of the business I’m currently in. It’s definitely time, and I’ve not really got a frontline role in the company anymore, so it shouldn’t make a difference to them. I’d like to give my shares to my son without selling them. Is it possible to gift shares like this?

Answers

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It is possible to gift shares to someone else as long as the company authorises the transfer or allotment. The director will have to refer to the articles of association to determine whether you can do this.

Some companies include restrictions on the transfer of existing shares or sale of new shares - restrictions such as pre-emption rights of existing shareholders and the director’s power to transfer are the most common.

These types of restrictions are often put in place to protect shareholders’ rights and ensure all transfers are in the best interests of the shareholders and the business as a whole.

Many companies choose to gift shares to employees as part of an employee share scheme. This can be an effective way to encourage loyalty and hard work, and it is also a tax-efficient way to provide remuneration. In most cases, these types of shares will be non-voting.

a year ago
 

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