Share Matters

What are shares and why are they issued?

When a person buys shares in a company, he/she becomes one of the owners. Shareholders choose who runs a company and are involved in making major decisions.

The purchase and sale of shares in non public companies is normally carried out by private agreement between the seller and the purchaser. There are no facilities or a recognised exchange to handle such private sales or purchases.

For businesses that are looking for capital to fund high growth, it can be done through formal equity funding finance such as Business Angel Investors and Venture Capital firms. These investors are willing to put up capital for a share in a business. Raising money this way means that you don't have to pay the money back or pay interest to the investors. Instead, shareholders are entitled to a share of the distributed profits of the company, known as dividends.

People sell shares of their company for various reasons, including:

• raising finance
• an exit for original investors who wish to realise their investment
• getting market valuation for the company
• giving an incentive for staff using shares or share options
• a way to raise your business' profile

As you can see below, BTC can help you with all of your share matters including issuing further shares, transfer of shares and producing share certificates.

Issued share capital

A company does not have to issue all its capital at once. Issued capital is the nominal - rather than actual - value of the part of the authorised share capital that has been issued to shareholders.

It is a normal practice to form a company with an authorised capital of 1,000 shares at £1.00. If for example it issues 50 shares, it has an issued share capital of £50.

Public limited companies must have at least £50,000 of issued share capital. At least a quarter of this, plus any premium from selling the shares at a higher price, must be paid up before the company can start trading.

If you wish to issue further shares up to the authorised share capital, form 88(2) should be completed and sent to the Registrar of Companies at Companies House. You must notify Companies House of any new shares issued by completing Form 88(2).

We can also file Form 88(2) electronically on your behalf just for £10+VAT. BUY NOW

Transfer of shares

Companies can not record share transfers until:

• A suitable transfer document has been presented to the company or
• The rights relating to the shares have been properly given in accordance with the law.

If you want to transfer your shares to someone that you know, you can do so by using a stock transfer form if you hold a share certificate. If your holding is held in a corporate sponsored nominee or you do not hold the certificate for your holding please contact us for advice.
The transfer procedure in summary is:

• The completion of the share transfer form
• The seller signs the share transfer documents
• The purchaser is sent the documents
• The purchaser send the document to the company
• The company's directors acknowledge the transfer
• The company records are alter to reflect the new ownership and issues the appropriate share certificate

If you wish to do this yourself, please download the form CON40G stock transfer form.

If you wish for us to do it for you, the cost is just £30+VAT (stamp duty extra). Please download and complete the form and send it back to us with the share certificates. Please ensure you complete the form as follows:-

• the full name and address details for both transferor (the old owner) and transferee (the new owner)
• the signature of the transferor
• the name of the Company (referred to as Name of Undertaking) in which the shares are held
• the class of share (for example Ordinary Shares)
• the amount to be transferred in both words and figures
• do not use correction fluid or stick on labels. If you make any mistakes when completing the form, just cross out the error and initial the amendment (s)the signature of the transferor
• please use full names of person(s) to whom the security is being transferred. We are unable to accept initials
• ensure that you fully complete and sign both the front and back of form

We will automatically send the new certificate to the transferee at the address quoted and any balance certificate back to the transferor.  Transfer of shares £30+VAT BUY NOW

Share certificate

to validate who owns shares in the company.  It can act as invoice/receipt for shares allocated to shareholders.  Printed on a high quality card £7.50+VAT   BUY NOW

Notes on Stamp Duty

Stamp Duty may be payable depending on the type of transfer. As a general rule, if no money is changing hands then the transaction is not liable for Stamp Duty. To be exempt, the transfer must fall into one of the categories shown on page 2 of the form. For example, if you are giving your shares to another person as a gift, the transfer will fall into category 'L'.

If payment is being made for the shares then the person receiving them has to pay stamp duty and should not complete the back of the stock transfer form. If you are unsure whether or not you need to pay stamp duty on this transfer, please contact the Revenue & Customs Stamp Taxes helpline on 0845 603 0135 who will be able to advise you.

If the transfer is exempt from stamp duty or is not subject to ad valorem duty then the relevant section of the transfer form must be signed and completed by either the transferor, a solicitor or a person who has knowledge of all the facts. The transfer form and the relevant share or debenture certificate(s) are then lodged with the company for registration. If the transfer appears to be in order it is then presented to the board of directors to approve registration of the transfer, the cancellation of the old share certificate and the issue of a new share or debenture certificate in the name of the transferee(s) and, if necessary, a balance certificate to the transferor. The appropriate entries are made in the register of transfers, the register of members and, if necessary, the register directors' interest. Note that a director must specifically give notification to the company of a change in his interest in shares stating the number and class of shares or debentures involved and the price (s324 CA 85).