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What is Share Transfer or Stock Transfer Form?

06th March 2012
By Herry Taylor in Law
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What is stock transfer form?
Share can be sold or given away unless the company has prohibited the right of transfer of shares in its articles of association or shareholders have entered into a contract (shareholder agreement) not to transfer a share. To transfer a share it is necessary to record the details of the transfer of shares on the stock transfer form. Under the stock transfer Act, the shareholder stock transfer form will be proper instrument to transfer shares.

Use of stock transfer form
Stock transfer form is used to transfer share or shares from one shareholder to another shareholder. Stock transfer form is also known as share transfer form.

The Stock Transfer Form is suitable for use by any private or public limited company incorporated. The model articles of association states that:
• Shares may be transferred by means of an instrument of transfer in any usual form or any other form approved by the directors, which is executed by or on behalf of the transferor.
• No fee may be charged for registering any instrument of transfer or other document relating to or affecting the title to any share.

• The company may retain any instrument of transfer which is registered.
• The transferor remains the holder of a share until the transferee’s name is entered in the register of members as holder of it.
• The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent.

Procedure for share transfer
Sec771, Companies Act 2006 provides a new procedure on transfer of shares. Such as:
(1) When a transfer of shares in or debentures of a company has been lodged with the company, the company must either-
(a) register the transfer, or
(b) give the transferee notice of refusal to register the transfer, together with its reasons for the refusal,
as soon as practicable and in any event within two months after the date on which the transfer is lodged with it.
(2) If the company refuses to register the transfer, it must provide the transferee with such further information about the reasons for the refusal as the transferee may reasonably request. This does not include copies of minutes of meetings of directors.

The shareholder must provide the duly signed stock transfer form and share certificate to the transferee concerning to transfer of shares. The transferee after paying the stamp duty sends the stock transfer form and share certificate to the company. It is the privilege of the company to decide whether to accept the transfer or not. The board of the company usually makes a decision about the acceptance of the share transfer or the company secretary makes such a decision as authorised by the board. The company must accept the transfer if this is not barred by the articles of association. If the company reject the transfer, it must be must be communicated to the transferee within two month after the decision of refusal.
If the transfer is acknowledged by the company, the company will enter the all necessary entries in the register of the members and shall issue a share certificate to the transferee with in two month after the lodgement of the share transfer form.

Stamp duty on transfer of shares
If you are transferring shares yourself using a paper stock transfer form Stamp Duty may be payable when the value is over certain limits.

Net Lawman provides the share transfer form. Such as:

Stock transfer form (J10 and J30)
There are two types of share transfer form: the J10 is to be used when both signatories are present, while the J30 is used when there is only one signatory. In addition, we include a modern version of the J30 written in plain English. You’ll also receive our guidance notes as to how to complete the forms.
The forms can be used to transfer ownership of shares in any private limited company (ltd) or public limited company (plc) incorporated in the UK.
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