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Transfer of Shares Templates
Routine transfer of shares templates required in a private limited company, without a separate sale and purchase agreement. If the transfer is in connection with a negotiated sale and purchase of shares, see Buying or Selling a Company.
A transfer of shares can occur in various situations, such as a transfer between family members or business partners, the sale of all or part of the company or for tax planning purposes.
This page includes documents necessary for a standard transfer of shares in a private limited company, without a separate sale and purchase agreement for them. For transfers involving a negotiated sale and purchase of shares, see Buying or Selling a Company.
The transfer process will also depend on whether share transfers are restricted or regulated by the company’s Articles of Association or, if applicable, the company’s Shareholders Agreement. For instance, the transfer might be subject to a pre-emption procedure, where other shareholders have the right of first refusal to purchase the shares being transferred.
frequentlyasked questions
What does transferring shares mean?
Transferring shares means passing ownership of shares in a private limited company from one person or entity to another. This can happen for many reasons — such as a sale, a gift between family members, for tax planning or when an employee shareholder leaves a company.
Who can shares be transferred to?
Shares are usually transferred to:
- family members or companies in the same group
- business partners and other shareholders
- third-party buyers
However, the transfer of shares is subject to the company’s Articles of Association or any Shareholders’ Agreement, which may restrict who can receive shares or include shareholder pre-emption rights on share transfers.
Do all shareholders need to approve a transfer?
It depends. Some companies have pre-emption rights in the company’s Articles and/or Shareholders’ Agreement, giving existing shareholders the first opportunity to buy shares before they can be offered to others. Alternatively, the Articles and/or Shareholders’ Agreement may require that board or shareholder approval is required.
Can shares be transferred for free?
Yes, shares can be transferred as a gift. This is common between family members or as part of succession planning. However, even a free transfer must still follow the correct legal and company procedures. It is also important to check any tax consequences before doing this.
What documents are involved in a share transfer?
Typically, the following are required:
- Stock Transfer Form (in the prescribed form J30 available on the internet)
- Waiver of pre-emption rights if shareholders who have the benefit of pre-emption rights will waive these rights in relation to the share transfer
- Deed of Adherence to Shareholders Agreement if the transferee is required to become party to the company’s Shareholders’ Agreement
- Board Minutes approving the transfer
- Share Certificate update or replacement
- Indemnity for lost share certificate if the transferor has lost the original certificate for the shares being transferred
- Updated Register of Members
You can find the templates you need for routine share transfers in our Transfer of Shares section. For transfers linked to a negotiated sale, see our Buying or Selling a Company templates.
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