Transfer of shares—law and procedure
Transfer of shares—law and procedure

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Transfer of shares—law and procedure
  • Shares
  • Legal title and equitable title
  • Share transfers and the PSC register
  • The legal framework
  • Restrictions on transfer of shares
  • Identifying restrictions on transfer
  • Features of restrictions on transfer
  • Effect of a restriction on transfer
  • Removing, disapplying or waiving a restriction on transfer
  • More...

There are a number of circumstances in which shares in a company may be transferred, eg upon a sale of the shares, through the transmission of the shares by operation of law (eg upon the death or bankruptcy of a shareholder), by gift or upon the enforcement of a charge. For more information about the transmission of shares, see Q&A: Can personal representatives transfer shares in a company without a grant of probate?

It is most common for shares to be transferred upon a sale. A sale of shares will normally take place pursuant to the terms of a share purchase agreement or an option agreement.

A company may also buy back its own shares. For further information on share buybacks, see Practice Note: Share buybacks—a quick guide.

This Practice Note focuses on the transfer of the legal title in certificated shares upon a sale that is not a share buyback.

The transfer of shares in a listed company, an AIM company or a company with securities that are traded on any exchange is outside the scope of this Practice Note.

Shares

Shares in a company can be held in certificated form or uncertificated form.

Shares in a company are held in certificated form if the company has issued a physical share certificate in respect of the shares. Shares are held in uncertificated form if they are held through CREST (an

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