• How to Guide: Issue and Transfer of Shares Sep 15, 2020
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    Shares are “portions” of a company that is limited by shares and are simply a divided-up unit of the value of a company (each share is a specific percentage of the entire business). If you’re a business owner who has just completed your limited company formation, you’ll soon be making important decisions regarding the allocation of your company shares, including the issue and transfer of shares.

    Limited companies can not only issue more shares post incorporation, but its shareholders (members) may transfer or sell their shares to other individuals at any time. Both must adhere to the procedures set out in the in the Companies Act 2006, the articles of association (find out how to get a copy of memorandum and articles of association), and the shareholder’s agreement (if applicable).

    Transfer of Shares Explained

    In a limited company, the transfer of shares can be exercised from one individual to another in exchange for the following:

    · a monetary payment

    · a non-monetary consideration such as goods/products, services, knowledge, or writing off debts

    · as part of an employee share scheme

    · as a gift to a family member

    The transfer of shares after company formation can be processed by completing a Stock Transfer Form where you’ll be required to provide the following details:

    · Your company’s name

    · Company Registration Number (CRN)

    · Quantity and class(es) of shares being transferred

    · Existing shareholder (transferor) name and address

    · New shareholder (transferee) name and address

    · The amount paid for the shares

    · If applicable, the details of non-cash payments

    · Transferor’s signature

    · If applicable, stamp duty liability

    HMRC must receive a copy of the Stock Transfer Form if the sale value of the transfer exceeds £1,000. The transferee will have to pay Stamp Duty tax of 0.5% of the total sale value.

    The journey of the transfer of shares is not done just yet. After HMRC receives the form, the transfer of shares has to be...

    Read the full article for FREE at: https://www.yourcompanyformations.co.uk/blog/how-to-guide-issue-and-transfer-of-shares/

    Issuing Shares After Company Incorporation

    There could be many reasons why companies will be required to issue new shares, including:

    · bringing in new business partners

    · raising capital from external investors for funding purposes

    · to pay business debts

    · to introduce a bonus scheme for employees

    · to gift shares to family members

    There are no legal restrictions on the number of shares a private company can issue during or post incorporation, in accordance with the Companies Act 2006. However, if needed, some restrictions may be included in the articles of association and shareholders’ agreement. An authorised capital is one of the most common restrictions; it’s essentially a limit on the number of shares that can be issued.

    Owners of a shareholding company can form and issue whatever type of...

    Read the full article for FREE at: https://www.yourcompanyformations.co.uk/blog/how-to-guide-issue-and-transfer-of-shares/
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