There may be times when you want to change the share structure of your company; either by adding a new shareholder or by changing the existing proportion of shares between shareholders. A share transfer is the process of transferring existing shares from one person to another; either by sale or gift.
This article will cover how to transfer existing shares within your company, a guide for allotting shares can be found here. If you are unsure whether transferring or allotting shares would be a better option for your company, please contact your account manager.)
Shares can be transferred from a shareholder to another person (either a new or existing shareholder). Shares are transferred by way of gift or sale. Typically, shares are transferred to introduce a new shareholder.
So long as a company has enough shares, it’s possible to transfer shares in a limited company any time after incorporation.
Before you take any action on changing your share structure within your company contact your Account Manager so we can understand and advise on your plans.
Any transfer of shares needs to be formally actioned by you as the director. You will need to complete the following steps:
Confirm your shareholdings
If you’re a client of inniAccounts, your first port of call should be to inform your account manager of your plans; we’ll then be able to guide you through the process and update our software to reflect any changes.
When it comes to updating Companies House, we will take care of this for you if you have our company secretarial service. If it’s not included in your package, ask your account manager about our current fee or about adding our Company Secretarial Service to your package.
Before you transfer any shares, you need to confirm your current shareholdings, the number of shares you wish to transfer and the resulting share structure of your shareholders. If you are transferring shares to a new shareholder you will also need to confirm their name, date of birth, nationality, residential address, proof of ID and relationship to the other shareholders in your company.
In some cases, you may have insufficient shares in your company to allow your intended transfer. This would mean that you need to allot new shares. If you are unsure about the number of shares in your company, please contact your account manager.
Hold a board meeting
The share transfer must be approved through a board agreement. A board meeting should be held to review the stock transfer form and agree the transfer. Be sure to keep detailed minutes of your meeting that clearly display the revised share structure and share holdings. These minutes will need to be kept safe with your company records, they’ll later be used when updating Companies House and also provide a solid audit trail. If you’re an inniAccounts client, we’ll send you a template for the minutes of your meeting.
Complete a stock transfer form
A stock transfer form (or J30 form) is a standard document that can be used to transfer existing shares. It contains details of the seller (or gifter) of the shares and the receiver, the type and number of shares being transferred as well as any consideration that has been paid for the shares. As director, you need to complete these details before signing and dating the form. It’s standard practice to complete a stock transfer form in black ink and BLOCK CAPITALS. This form will need to be stored with your company records. If you’re an inniAccounts client, we’ll send you a template of the stock transfer form.
Issue new share certificates
Having agreed your share structure, you will need to issue new share certificates detailing the shareholdings – these will render any previous share certificates as effectively cancelled. If you are an inniAccounts client, we will send you a template share certificate to be signed and dated.
Update your company’s confirmation statement (CS01) with the new share totals
You now need to update your company’s confirmation statement, with Companies House, to show the new share structure within your company. If you transferred shares to a new shareholder, you need to include their details in your confirmation statement.
If a shareholder has over a 25% holding in the company, you will need to add them to the PSC register as part of your confirmation statement.
You can find a step by step guide for completing a confirmation statement here.
Should you have any issues with completing this process, we’re happy to help. Simply contact your account manager.