IRISH LIMITED COMPANY Share Transfer in an Irish Limited Company

Last updated: Jun 12, 2024

The process of Transferring Shares in an Irish Private Limited Company can be a complex and intricate journey. This guide is designed to explain the steps involved, from an existing Shareholder (transferor) transferring their shares to a new Shareholder (transferee), through sales or gifts, within the legal framework of the company's Constitution and Irish Company Law. It covers everything from completing the necessary Stock Transfer Form to the final registration in the company's records. Whether you're a seasoned business owner or new to corporate management in Ireland, this article provides a clear roadmap for ensuring a compliant and smooth Share Transfer process, emphasising the importance of professional guidance in these transactions.

Hands shaking though a laptop on a desk with a phone and a notebook, symbolising the agreement on Transferring Shares.
Transferring Shares in an Irish Limited Company

Understanding Shares

It is important that the Directors adhere to the company's Constitution and Company Law when Issuing Shares. The Shareholders are the owners of the company and they hold the Issued Shares, but the company itself, is a separate legal entity from the Shareholders. We recommend getting familiar with the Share Capital and the subject itself before deciding to Transfer Shares.

More detailed information about this topic can be found in our extensive Library under Shares, and you can learn more about Shareholders and their responsibilities in this section of the Library, which holds a wealth of information.

Transferring shares

Transferring Shares within an Irish Private Limited Company is common, whether through sale or as a gift. This process involves the transfer of share ownership from an existing Shareholder (Transferor) to a new Shareholder (Transferee). The transfer of shares is subject to certain conditions and restrictions that may be outlined in the company's Constitution or under Company Law, but may be transferred freely by a Shareholder.

If you're considering Transferring Shares in your company, it is important to seek professional advice. Please don't hesitate to Contact Us if you wish to do so, as our dedicated team is here to guide and assist you every step of the way.

Share Transfer Procedure

We will now delve into the specifics of each step, ensuring a comprehensive understanding of the Share Transfer process in Irish Private Limited Companies.

1. Stock Transfer Form

The Share Transfer begins with the completion and signing of the Stock Transfer Form by the current Shareholder (Transferor), detailing the transfer to the new Shareholder (Transferee). The Stock Transfer Form should specify the consideration, the description and number of securities, the Transferor by whom the transfer is made, and the name and address of the Transferee.

If the shares are not fully paid, the Transferee's signature is required to acknowledge the associated liabilities. Additionally, if the consideration for the shares exceeds €1,000, the form requires stamp duty payment at 1% paid. Once completed, the Stock Transfer Form, accompanied by the original Share Certificates, should be forwarded to the company for registration.

2. Director Approval

Share Transfer typically necessitates a formal approval process, often via a Board Resolution, unless an officer of the company has previously been authorised to accept Share Transfers.

However, 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, unless the Constitution provides otherwise. The Directors have 2 months after receiving the transfer instrument in which to decline and notify the Transferee of the refusal.

For further information about Written Resolutions, please visit our detailed Library for a wealth of information.

3. Register of Members

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.

More detailed information about the Register of Members can be found in Section 169 of the Companies Act 2014.

4. Register of Transfers

The details should be recorded in the Register of Transfers, documenting the Transferor, Transferee, share class, number of shares, the consideration, and the date of registration.

The Companies Act 2014 holds a wealth of information regarding the complexities of different Registers of a company. It is recommended to understand the importance of keeping accurate and updated records.

5. Update Register of Interests

The Register of Directors' and Secretaries' Interests must be updated within 3 days of the company being notified, should the transfer involve someone holding that position in the company.

More detailed information on the Register of Interests can be found in Section 267 of the Companies Act 2014.

6. Update Internal Register of Beneficial Owners

Changes in Beneficial Ownership as a result of the Share Transfer necessitate updates to the internal Register of Beneficial Owners, including details such as the Beneficial Owner's name, date of birth, nationality, and residential addresses, along with a statement of the nature and extent of the interest held.

To gain more insight and detail regarding Beneficial Owners, explore our Registration of Beneficial Owners Guidance article for a wealth of information.

7. Issue New Share Certificates

Within two months of the Share Transfer, new Share Certificates are issued to the Transferee, which must be signed and dated by two Directors or one Director and the Company Secretary, and subsequently stamped with the Company Seal.

Avail of our services for ordering a Company Seal for only €49 + VAT, or if you decide to Register Your Company through Incorpro, the Company Seal can be obtained for only €45 + VAT.

8. Notify RBO

Finally, any change in Beneficial Ownership must be reported to the Central Register of Beneficial Ownership (RBO) within 14 days of the Share Transfer. This can be filed on the RBO's Official Website.

IMPORTANT NOTE: The Share Transfer is not complete and the Transferee is not deemed the holder of the shares until they are entered into the Register of Members.

Notifying the CRO of Share Transfer

In the context of Transferring Shares within an Irish Private Limited Company, it is important to note that immediate notification to the Companies Registration Office (CRO) is not required at the time of the transfer. However, it is essential to ensure that this transfer is accurately reflected in the company's subsequent B1 Annual Return. This document serves as a critical record of the company's annual activities and changes, including Share Transfers.

For a deeper understanding of the Annual Return and its significance, our detailed CRO B1 Annual Return Guidance article provides extensive insights and clarifications.

Additionally, to streamline this process and ensure compliance, Incorpro offers B1 Annual Return Filing Service. Our service is designed to assist companies in efficiently managing their annual reporting obligations, thereby ensuring adherence to statutory requirements.

Further Guidance and Assistance

Should you have any queries or require assistance with your Accounting and Tax needs, our dedicated team at Incorpro is here to help. Connect with us by calling 01-4429409, or visit our Contact Page for more ways to get in touch. Stay updated and engaged by following our Social Media Pages on Twitter, Facebook, LinkedIn and Instagram.

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