What is the difference between issuing and transferring shares in a UK company?
Issuing shares creates new shares and increases the company's share capital, typically to bring in new investment. Transferring shares involves existing shareholders selling or gifting their shares to someone else, without changing the total share capital. Both processes have separate legal requirements and filing obligations under the Companies Act 2006.
Do I need to inform Companies House when transferring shares?
Share transfers are not filed directly with Companies House at the time of transfer, but the updated shareholder information must be reflected in your next Confirmation Statement (CS01). If the transfer affects a Person with Significant Control (PSC), the PSC register must also be updated and Companies House notified within 14 days.
What documents are needed to transfer shares in a UK limited company?
A share transfer requires a completed stock transfer form (J30), board approval if required by the Articles, an updated register of members, cancellation of the original share certificate, and issuance of a new share certificate to the incoming shareholder. Where stamp duty applies, HMRC stamping is also required.
Can I issue shares at different values or to different classes of shareholders?
Yes. UK limited companies can issue different classes of shares - such as ordinary, preference, or non-voting shares - each with different rights and values, provided the Articles of Association permit it and the appropriate resolutions are passed.
What happens to shares when a shareholder dies?
When a shareholder dies, their shares pass to their estate. The executor or administrator can transfer the shares to a beneficiary or sell them, subject to any restrictions in the Articles of Association. A grant of probate is typically required before the transfer can be completed.
How do I issue new shares in a UK limited company?
To issue new shares, the company must pass a board resolution authorising the allotment, check the Articles of Association for any restrictions, and file a SH01 form with Companies House within one month of the allotment. New share certificates must also be issued and the register of members updated.
Is stamp duty payable on share transfers in the UK?
Yes. Stamp duty at 0.5% is payable on share transfers where the consideration exceeds £1,000. The buyer is responsible for paying stamp duty to HMRC and submitting a stock transfer form (J30). Transfers by way of gift may qualify for exemption, but this must be confirmed with HMRC.
Do I need shareholder approval to issue new shares?
In most UK companies, the directors need prior authority - either granted in the Articles of Association or by a shareholder resolution - before issuing new shares. This protects existing shareholders from having their ownership diluted without consent.
Can non-UK residents hold shares in a UK limited company?
Yes. There are no restrictions on foreign nationals or non-UK residents holding shares in a UK limited company. Ownership is open to individuals or entities worldwide, making UK companies attractive for international investors and cross-border structures.
Can I increase the number of shares without increasing share capital?
Yes - by subdividing existing shares. For example, one share of £1 can be split into 100 shares of £0.01, increasing the number of shares while keeping the total share capital the same. A special resolution must be passed and a SH02 form filed with Companies House to complete the process.
