Transfer of Shares
Use these documents when an existing shareholder wishes to transfer their shares to another person (e.g., selling their stake or gifting shares to a spouse). Unlike issuing new shares, this does not increase the total number of shares in the company; it simply changes who owns them.
When to Use These Templates
- Stock Transfer Forms: The standard legal instrument (Form J30) used to transfer ownership.
- Board Approvals: Directors generally have the right to refuse a transfer (under the Articles). These minutes record their formal approval to update the Register of Members.
- Refusal: If the directors refuse to register a transfer, they must give the transferee notice (s771 CA 2006).
Compliance and Legal Framework
- Stamp Duty: If the consideration (payment) for the shares is over £1,000, the Stock Transfer Form must be sent to HMRC for stamping and Stamp Duty paid (usually 0.5%).
- Updates: The transfer is not legally complete until the company enters the new owner's name in the Register of Members.
- PSC Register: If the transfer results in someone holding more than 25% of the shares, you must update the PSC Register and file form PSC01/PSC02 with Companies House.
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Frequently Asked Questions
A shareholder wants to sell or gift their shares. What paperwork makes the transfer legal?
Three elements: a completed stock transfer form (form J30) signed by the transferor, stamp duty dealt with where it applies, and the company entering the new owner in the register of members, which is the step that actually transfers legal title. Share certificates are then reissued. Until the register is written up the buyer holds only an equitable interest. This sub-folder provides the stock transfer form, board minutes and supporting documents.
When do we have to pay stamp duty on a share transfer?
When the consideration exceeds 1,000 pounds: the stock transfer form must be sent to HMRC and stamp duty paid, usually 0.5 percent rounded up to the nearest 5 pounds, before the company can register the transfer. Transfers at 1,000 pounds or under, and genuine gifts with no consideration, do not need stamping, complete the relevant certificate on the form instead. HMRC's process is electronic: email the form and pay online.
Can our directors refuse to register a share transfer?
Often yes, if the articles give them the power, common in private companies to control who becomes a shareholder. The discretion must be exercised in good faith in the company's interests. If the board refuses, it must give the transferee notice of the refusal with reasons as soon as practicable and at latest within two months of the transfer being lodged; silence past that point invites challenge. The board minutes here record approval or a properly reasoned refusal.
Do we need to tell Companies House when shares are transferred?
Not at the time of the transfer. There is no Companies House filing for a private company share transfer; the change appears publicly when you file your next confirmation statement with updated shareholder details. What you must do immediately is update the register of members, because that entry completes the transfer. Keep the stamped stock transfer form with your records as evidence for the register entry.