Board minutes approving a transfer of shares

Use these board minutes of meeting to approve a transfer of shares in your company. It is important that you use these template board minutes when transferring shares, because if you do not follow the correct process the share transfer may be invalid and/or there may be disputes between the shareholders and the company over who owns the shares. Using these minutes can save you time and money in the long term. As an alternative to convening a board meeting and using these board minutes, your company can pass a written board resolution to approve a share transfer if you prefer. If your company has only one director, you should use our sole director resolution to approve any share transfer. Note these board minutes are drafted for a company with model articles of association. If your company does not have the model articles or has a shareholders’ agreement, you should check them for any provisions or restrictions on share transfers before using these minutes. For further guidance on the process to follow to transfer shares, see our detailed Q&A on Transferring shares . You can also purchase this document as part of the Share Transfer Toolkit .
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Sole director resolution approving a transfer of shares

Use this sole director resolution template to approve a transfer of shares in your company. By using this template resolution, you ensure you follow the correct legal process and record the share transfer properly. Failing to follow the correct process can lead to a share transfer being invalid and legal disputes between shareholders and your company regarding the ownership of shares. Resolving these types of disputes can be time-consuming and costly. These sole director resolutions should be used if your company has only one director and your company has the model articles of association. If your company has bespoke articles of association or has a shareholders’ agreement, you should check the rules around share transfers in those documents before using this resolution. If your company has more than one director, you should use our template board minutes or written board resolution to approve a share transfer. For further guidance on the process to follow to transfer shares, see our detailed Q&A on Transferring shares . You can also purchase this document as part of the Share Transfer Toolkit .
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Transferring shares
How to transfer shares
Q1:How do I transfer shares?

There is a set transfer procedure to follow when a sells their , whether voluntarily (eg if exiting the or restructuring) or involuntarily (eg if the is a and their contract says they must sell their if they are removed from office).

For the process to follow in the event of a sale (or gift) see Q&A 5.

In a few exceptional cases it is possible for to change hands without a sale taking place, in which case the set transfer procedure is not followed. For example, an individual 's transfer automatically to their when they die, or to their if they become . This is known as transmission of ; see Q&A 7 for the process to follow in those circumstances.


The share transfer process
Q5:What is the process I need to follow to transfer shares?

In order to transfer , you should:

  1. Check your 's of association and any

    The freedom of your 's to transfer their might be limited by your or by agreement.

    1. If your has the , they do not contain any restrictions about who can be a .

    2. If your has bespoke , it is common for them to contain restrictions on (eg to minors or bankrupts) or require any one to offer their to the others first, before selling them outside the ().

  2. If desired, negotiate and agree the terms of a purchase agreement

    This agreement is entirely optional. It will only be relevant if there are specific legal terms that you want to attach to the (see Q&A 3 and Q&A 4).

    If you want one, you will need the help of a lawyer to negotiate and agree the terms of a purchase agreement. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

  3. Fill in a stock transfer form

    For it to have legal effect, the parties need to properly document the . A stock transfer form completed by the transferor is the best way to do this. See Q&A 8 for help filling in the form. Note, even if you are entering into a separate purchase agreement, you still need to fill in and sign a stock transfer form.

  4. The transferee pays the purchase price (if any) to the

    In exchange for any agreed payment, the transferring gives the person to whom the are being transferred the completed stock transfer form and the existing (s).

  5. Pay any stamp duty within 30 days of the stock transfer form being signed and dated

    Stamp duty is payable if the price for the is more than £1,000, unless certain exemptions apply.

    Usually a buyer of is responsible for paying stamp duty. It is charged at 0.5% of the total price and rounded up to the nearest £5. For example, if £2,500 is paid for , stamp duty will be £15, because 0.5% of £2,500 is £12.50, which is rounded up to the nearest £5, ie £15. If stamp duty is not payable, the second page of the stock transfer form should be completed (see Q&A 8 for further guidance).

    Stamp duty should be paid no later than 30 days after the stock transfer form was signed and dated. After this time, interest and penalties for late payment can be charged. Stamp duty is paid by sending a copy of your stock transfer form to HMRC and paying the amount due by bank transfer, BACS or CHAPS.

    More specific guidance on stamp duty, and the exemptions to stamp duty, are beyond the scope of this service. If you are unsure about whether stamp duty is payable, you should seek separate tax advice or contact .

  6. Approval (or refusal) of the by your 's

    After have confirmed payment of stamp duty (or the certificate is completed to confirm no stamp duty is payable), the stock transfer form should be sent to your along with the confirmation and any other relevant documentation such as the transferring 's original . Your must review the documentation to check all is in order and decide whether to approve or refuse the transfer. In most cases, this is a formality.

    See Q&A 9 for what your should consider when deciding to approve the . They must respond within two months of receipt of the stock transfer form by either registering the (see Q&A 10) or notifying the buyer of a refusal, giving reasons (see Q&A 11). Failure to respond in time is an offence committed by the and any at fault, punishable by a fine.

  7. Update your 's

    Once your has reviewed and approved a , your needs to give legal effect to it by updating its , cancelling the transferring 's old certificate and issuing a new certificate to the transferee.

    The must be updated as soon as after the transfer is approved. It is a criminal offence committed by your and any at fault to fail to keep your up to date, punishable by a fine. For guidance on how to update your , see Keeping a register of members.

  8. Check whether the transfer changes the of your (PSCs)

    After any , you must check whether the transfer affects who has significant control of your – for example, if the transfer increases an individual's total shareholding to over 25% (or indeed reduces it to below 25%).

    See How to identify and notify people with significant control of a company (PSCs) for guidance on how to identify the (PSCs) in respect of your , together with templates of the correspondence you might need to use in order to confirm their details.

    If a affects who has significant control of your , you must take the steps described in Q&A 6 as soon as after the transfer is completed. If a does not affect who has significant control of your , there are no additional steps to take here.

Our Share Transfer Toolkit sets out the process to follow in order to transfer and contains all the documents a will need to properly approve and register a .


Q6:What steps should I take if a transfer of shares affects the persons with significant control of my company (PSCs)?

If a affects who has significant control of your (for example, by increasing an individual's total shareholding to over 25% or reducing it to below 25%), you will need to make updates to your and notify accordingly.

The specific steps you must take will depend on the nature of the change as a result of the transfer. The most common examples are set out below:

  1. If as a result of a the transferee becomes a , you must add their details to your as soon as and give notice to using form PSC01.

  2. If the transferee was already a but the transfer has changed the nature of their control over your (for instance increasing their total shareholding from 40% to 60%), you must amend their details in your as soon as and give notice to using form PSC04.

  3. If the transferor was already a but the transfer has changed the nature of their control over the (for instance reducing their total shareholding from 60% to 40%), you must amend their details in your as soon as and give notice to using form PSC04.

  4. If the transferor was a but as a result of the ceases to be one, you must amend their details in your as soon as and give notice to using form PSC07.

You can file the forms online using the Companies House WebFiling facility (if your is registered for online filing), or otherwise by posting a copy of the relevant form(s) to , Cardiff, CF14 3UZ. The forms should be filed within 14 days of the date you update your . For guidance on how to update your , see Keeping a register of people with significant control of a company.

Failing to make the necessary filings, or failing to keep your up to date, can potentially attract a fine and constitutes an offence by both the and any who are at fault.


Automatic transmission of shares (death or bankruptcy)
Q7:How do I deal with the automatic transmission of shares on the death or bankruptcy of a shareholder?

An individual 's transfer automatically to their when they die, or to their if they become . This is known as transmission of and the recipients are known as as transmittees. The action your needs to take is different from that involved in an ordinary .

The process you must follow will depend on your 's of association. If you have , the proper process is:

  1. Find out what the transmittee intends to do

    Request documentation confirming the entitlement of the personal representative or to the (eg grant of ) and require them to notify your in writing whether they wish to become the registered holder of the , or intend to transfer the to someone else.

    Your next steps will depend on the response:

    1. Transmittee wishes to be registered as holder of the

      If the transmittee gives written notice that they wish to be registered as the holder of the , simply enter their name on your (see Keeping a register of members for how to update your ). Note that the transmittee will not be a proper until they are registered as one, so you must act promptly. Failure to do so is a criminal offence by the and any at fault, punishable by a fine.

      You must check whether or not the transmittee will become a (or ) of your if they elect to be registered as holder of the , for example if it will bring their total shareholding to over 25%. If they do newly qualify as a , or if they already qualified but the nature of their control has changed with the extra , you must amend your to reflect the change. It is a criminal offence committed by your and any responsible to fail to keep your up to date, punishable by a fine. See How to identify and notify people with significant control of a company (PSCs) for how to tell if someone is a and how to check their details, together with templates of the correspondence you need for the process. See Keeping a register of people with significant control of a company for how to update your to reflect the correct position.

    2. Transmittee wishes to transfer the to someone else

      If the transmittee indicates that they will transfer some or all of the to others, they must then fill in a stock transfer form and everyone proceeds as if it were a normal sale by the original (ie the person who is now deceased or ) by following the process in Q&A 1.

  2. Recognise the rights of the transmittee throughout

    During the time that the transmittee holds the , but before they have been registered as a member of the or have transferred the to someone else, the transmitee generally has the same rights as the original holder except that they cannot attend or vote, whether at meetings or on a . This means that, for example, you must send the transmittee notice of or meetings of holders of their , even though they do not have a right to attend.


How to complete a stock transfer form
Q8:How do I fill in a stock transfer form?

Note that the content here is only relevant if the are fully paid up at the time of transfer (ie the has paid your the full of the ).

The stock transfer form, also known as the J30 form, is the form which the transferring fills in to complete a . There is no universal template for a stock transfer form, and the format can vary slightly depending on the template used. For an example of a commonly used style, see Blank stock transfer form.

For a step-by-step guide to filling in the stock transfer form see Step-by-step guide to completing a stock transfer form.

Once the stock transfer form is completed, it must be sent by the transferee either to for payment of stamp duty, or to your if stamp duty is not payable. See Q&A 5 for guidance on stamp duty and the remainder of the process.


Directors' approval of a share transfer
Q9:What should my company directors consider when deciding whether to approve a share transfer?

Your do not have power to refuse a if everything is in order, unless they are given such power by your of association.

If you have used the , your will have the discretionary power to refuse to register a .

In all cases, your must notify the proposed transferee of the of their decision within two months of receiving the stock transfer form. Failure to respond is an offence committed by the and any at fault, punishable by a fine.

Your need to consider three things when deciding whether to approve a :

  1. Check the paperwork is in order and stamp duty has been paid

    Your must check that:

    1. the stock transfer form has been filled in properly, signed and dated (see Q&A 8 for how this form should be filled in);

    2. the details on the stock transfer form match your (ie that the number and being transferred actually belong to the seller);

    3. the correct amount of stamp duty has been paid, or no stamp duty has been paid and the certificate has been properly completed and signed (see Q&A 5 for further guidance on stamp duty);

      If your proceeds with registering a transfer where stamp duty has not been correctly paid, the responsible can be fined up to £300;

    4. the who wishes to transfer has a valid, original .

      If they do not, the should insist on the signing an , which will protect the in the unlikely event of them attempting to transfer which they do not hold (see Indemnity for lost share certificate for a template you can use if this is the case).

    If there is an issue with any of the formalities above, in most cases it can easily be corrected by the asking the transferee and/or transferor to take the necessary action so the transfer can be approved.

  2. Check your and do not prohibit the transfer

    Your must make sure that the is permitted by your 's and (if available) any . These may prohibit transfers in certain circumstances. For example, they may state that cannot be transferred unless they are first offered to existing (called a right of pre-emption).

    If the proposed is not permitted by the , your must not approve it and should not do so if prohibited under a .

  3. Exercise any discretion granted by the of association

    Finally, your 's may give the broad discretion to refuse the for any reason. This is the case, for example, in the . There is no power for your to block a transfer if your do not permit it.

    If your do have such a discretion, they must use it in in the best interests of the having given consideration to the 's right to transfer their . They must not allow their own personal opinions or preferences to affect their decision.

    The discretionary power to refuse a is used sparingly in practice. Before doing so, your should give serious consideration to obtaining legal advice. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

Once the have considered these factors, they are in a position to decide whether the should be approved or refused. See Q&A 10 for how to approve a , Q&A 11 for how to refuse a and Q&A 12 for the consequences of refusal.


Q10:How do my company directors approve and register a share transfer?

If the checks in Q&A 9 have been completed and your are ready to approve a , they should do so formally by convening a and passing a to that effect.

For guidance on how to convene a , see How to make a board decision.

The to approve and register a will usually be very straightforward. The will simply agree to approve the transfer, resolve to update the 's , cancel the old and issue a new to the transferee. For template board to approve a see:

  1. Board minutes approving a transfer of shares;

  2. Written board resolution approving a transfer of shares; and

  3. Sole director resolution approving a transfer of shares.

To give legal effect to a , the 's must always update the as soon as after the transfer is approved. Until the is updated a is not legally completed, so you should act promptly. It is a criminal offence committed by your and any at fault to fail to keep your up to date, punishable by a fine. For guidance on how to update your , see Keeping a register of members.

You must also check whether or not the transferee will become a (or ) of your by virtue of the transfer of the , for example if the transfer will bring their total shareholding to over 25%. If they do newly qualify as a , or if they already qualified but the nature of their control has changed with the extra , you must amend your as soon as to reflect the change. It is a criminal offence committed by your and any responsible to fail to keep your up to date, punishable by a fine. See How to identify and notify people with significant control of a company (PSCs) for how to tell if someone is a and what to do if they are one.

Our Share Transfer Toolkit contains all the documents a will need to properly approve and register a .


Q11:How do my company directors refuse to register a share transfer?

If your :

  1. have the power to refuse a (to be found in your 's of association); and

  2. want to refuse a for one of the reasons outlined in Q&A 9,

they must convene a and actively resolve to refuse the transfer.

Your must make a decision to refuse within two months of receiving the stock transfer form, otherwise they lose the right to refuse. Additionally, failure to respond within two months (or to give reasons for a refusal within that time) is an offence committed by the and any at fault, punishable by a fine.

For guidance on how to convene a see.

The to refuse a will involve your identifying their reasons for refusal and resolving to send notice of the refusal accordingly. The notice of refusal, including reasons, must be delivered to the buyer as soon as possible after the (and at the latest within two months of the date the transfer was received by your ).

Although there is no legal obligation to notify the transferring of a refusal, in practice a will often do so, particularly as the transferor will remain the legal if a transfer is refused (see Q&A 12). If your has , they require the stock transfer form be returned to the proposed transferee along with the notice of refusal. The can only keep the transfer form if they suspect that the proposed transfer is fraudulent. If your has bespoke , any other steps that are required by the must be taken to complete the process.

Before exercising any discretion to refuse to register a , your should give serious consideration to obtaining legal advice. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


Q12:What happens to the shares if my company directors refuse to register a share transfer?

Where a has been lodged with your , but your has not registered it, from a legal perspective the transferring remains the legal owner of the they wish to transfer. The legal ownership of your 's is only transferred when the transferee's name is entered into your 's as the holder of the .

Your ' decision to refuse a may well be temporary, for example if they cannot approve it because some required formality has not yet been complied with such as the payment of stamp duty (see Q&A 9). In such cases, the transferee and/or transferor can simply take the necessary remedial steps (as specified by the in the notice of refusal) and then re-submit the transfer for approval and registration.