(a) What is the procedure for the transfer of shares?
The process for transferring shares to new or potential investors is simple. The existing shareholder has to fill out the relevant portion of the Stock Order Form and surrender the share certificates to the potential shareholder. The shares will officially be in the name of the new member once the appropriate enteries are made in the register of members.
Share transfers are subject to 0.5% ad valorum stamp duty on the total value of the transaction. For example, 100 £1 shares sold for £100 each generates a total value of £10,000 and stamp duty payable of £50. Transactions which generate less than £1,000 total value or consideration will become exempt from the stamp duty, this is done by signing a simple declaration on the reverse of the stock transfer form.
Any stamp duty payable is sent directly is HMRC Stamp Office at City Centre House, 30 Union Street, Birmingham B2 4AR along with the completed stock transfer form.
(b) What are the prescribed particulars of shares?
This refers to the rights of the shares. Ordinary shares have rights concerning voting, rights to dividends and rights to capital. Some shares have the right to be redeemded.
For all standard ordinary shares, unless informed differently, we use the default position of
'Full rights to receive notice of, attend and vote at general meetings. One share carries one vote, and full rights to dividends and capital distributions (including upon winding up)'
This statement will have to be repeated on the annual return and any other statement of capital including further allotments of shares (Form SH01)
(c) Can a company reduce its share capital?
A company can go through a capital reduduction scheme without the need for court proceedings by the solvency statement route, this is complex and may need legal advice. A company can repurchase its own shares from reserves if the shares fulfil certain criteria. Prior approval by HMRC may be required.
For furthe details on any of the these vsit the appropriate page on our corporate legal menu.
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