Last updated: Jun 16, 2022
The transfer of shares in an Irish private limited company from an existing shareholder (transferor) to a new shareholder (transferee) whether by sale or gift, is very common. Subject to any restrictions in the company's constitution or under company law, shares may be freely transferred by a shareholder.
It is important to seek professional advice when transferring shares. Please contact us if you wish to transfer shares.
A stock transfer form must be completed and signed by the transferor transferring the shares to the transferee. The stock transfer form should specify the consideration, the description and number of securities, the person by whom the transfer is made and the name and address of the transferee.
The transferee will need to sign the transfer form if the shares have not been fully paid up as they will accept the liability of these shares.
If the consideration for the shares is above €1,000, the stock transfer form must be stamped, i.e. stamp duty at 1% paid.
The stock transfer form along with the original share certificates should be forwarded to the company for registration.
In most cases approval of the transfer by the company is a formality, confirmed via a board resolution unless an officer of the company has previously been authorised to accept share transfers.
However, save where the Constitution provides otherwise, the directors of a company may in their absolute discretion and without assigning any reason for doing so, decline to register the transfer of any share. The directors have 2 months after receiving the transfer instrument in which to decline and notify the transferee of the refusal.
The number of shares held by the transferor should be updated and, if the person is no longer a member, the date of cessation as a member should be entered. The name, address, share class, number of shares and date of registration of the transferee should be noted.
The transferee, transferor, share class, number of shares, consideration, and date of registration should be recorded on the Register of Transfers.
The Register of Directors' and Secretaries' Interests must be updated within 3 days of the company being notified, if the transfer involves someone holding that position in the company.
If the transfer results in a change to the beneficial ownership, the internal register of beneficial owners is updated with the name, date of birth, nationality and residential addresses of the beneficial owner along with a statement of the nature and extent of the interest held.
The new share certificates are issued within 2 months of the transfer taking place to the transferee. Share certificates must be signed and dated by two directors or one director and the Company Secretary. Certificates must also be stamped with the Company Seal.
The directors notify the Central Register of Beneficial Ownership (RBO) of any change in beneficial ownership within 14 days of the transfer taking place.
The transferee is not deemed the holder of the shares until they are entered into the Register of Members.
The CRO are not required to be notified of a transfer of shares at that time. The transfer should be reflected in the following B1 Annual Return of the company.
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