Rocket Lawyer has solicitors available to assist you issuing new shares and/or transferring existing shares. Our lawyers will arrange an initial free consultation to answer your questions about the process and give you a fixed price quote.
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Private limited companies will generally have at least one share when they are registered. As they grow, it may be necessary to issue new shares to bring in new investment or change the business structure. This may also involve the issuance of different types of shares.
Existing shares can be transferred to new owners for personal or business reasons. Shareholders may choose to relinquish some of their shares and transfer them to a new business partner, in order to bring them on board. A shareholder may also want to transfer some (or all) of their shares to their spouse or a family member, as a gift. Alternatively, shares can be sold in return for cash or other assets (such as shares in another business).
The main difference is that issuing (or allotting) shares creates new shares which are distributed amongst shareholders - often when a company is set up. By contrast, share transfer involves the transfer of existing shares - always after the company has been formed. Stamp Duty is also normally payable by the purchaser when shares are transferred, but not in respect of shares issued or allotted.
Shares can be privately offered to an individual or business. The company directors must:
decide how many new shares it wants to issue
check the company articles to find out if they authority to do so; if not, the company shareholders must pass a resolution authorising the directors to issue new shares
ensure that the proposed share issue complies with any pre-emption rights or other restrictions contained in their articles of association or shareholders agreement
issue share certificates to the share recipient
complete and file Form SH01 with Companies House
update the register of members
include the new shareholder on their next confirmation statement.
For more information, read Share transfers and issuing new shares.
Shares can be transferred to an individual or business. Before transfer, the shareholder wishing to transfer their shares should check the company’s articles of association and/or shareholders agreement to see if any restrictions are placed on the transfer of shares. Such restrictions may include a restriction on transfers to family members and pre-emption rights of existing shareholders (ie a shareholder’s right of first refusal over the transfer of existing shares).
consider and approve the transfer of shares
complete a stock transfer form
pay stamp duty where applicable
cancel the old share certificates and issue new ones to the new shareholder
confirm the share transfer as part of the annual confirmation statement to Companies House
Read Share transfers and issuing new shares for more information.