What is a share transfer?
A share transfer means ownership of shares is formally moved from one person to another. For unlisted shares, this happens outside the exchange, often through a written agreement.
The process step by step
- Buyer and seller find each other — Via platforms, brokers, or directly.
- Negotiation — Parties agree on price, number of shares, and terms.
- Transfer agreement — A written agreement is drafted specifying the terms.
- Payment — The buyer pays the seller.
- Registration — The company updates its share register with the new owner.
- Confirmation — Both parties receive confirmation that the transaction is complete.
Common pitfalls
- Right of first refusal clauses — Don't forget to check if the charter requires pre-emption rights.
- Stamp duty — Transfer of shares may incur stamp duty.
- Documentation — Save all agreements and confirmations for tax filing.
Summary
A share transfer is the formal process for changing ownership of unlisted shares. Done correctly, it's simple but requires accuracy with agreements and registration.