Company shares and shareholders
Sale and transfer of shares
Share dealing is a complex area and specialist advice should be sought from solicitors, accountants and company law agencies.
Transfer and transmission of shares
Shares in a listed company are transferred through brokers using the Stock Exchange Euroclear service. However, in a private or unlimited company, shares are usually transferred by private agreement between the seller and buyer, subject to the company's rules and approval of the directors.
Certain taxes apply when you transfer or sell 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.
- Stamp Duty reserve tax is normally payable when you transfer shares through a broker using the Euroclear service.
- Any gains you have made on selling shares may be subject to Capital Gains Tax. GOV.UK provides further guidance on tax when you sell shares.
When a shareholder dies or becomes bankrupt, their shares and the rights associated with them must be given to a personal representative or executor.
Issuing a prospectus
If you want to list your company on the Stock Exchange, or offer unlisted securities to the public, you need to publish a prospectus or listing particulars. Only a public limited company can do this.
The prospectus has three main functions:
- setting out all the information that you must make public under the Listing Rules
- acting as a marketing tool for shares in your company by describing the business and its prospects
- setting out the price of your company's shares and how much capital you hope to raise
The UK Listing Authority, part of the Financial Services Authority, must approve the prospectus.
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