Share Transfer

Each company with a share capital has an authorised share capital amount which is stated in the memorandum of the company. Therefore any increase or reduction in this figure involves a change to the memorandum, and the articles of association where it is stated there also, of the company which the members must resolve to do. A reduction of issued share capital generally requires a High Court Order under s72 of the 1963 Companies Act.

 Shareholders may transfer their shares to existing shareholders or third parties (in cases of company de-mergers, share swaps, restructuring)

The companies Memorandum and Articles of Association and/or shareholders agreements need to be consulted prior to any transfer for any restrictions on the transfer of shares. Due consideration needs to be given to minority rights and the best interests of the company.

A transfer of shares must be approved by the Directors and the appropriate stamp duty paid to the Revenue Commissioners. Stamp duty is calculated at 1% of the total consideration paid or the market value for the shares.

Once the appropriate stamp duty is paid, the Revenue will issue a stamping certificate which must be provided to the Company as proof that the appropriate stamp duty has been paid. 

Shareholders have the ability to transfer their shares to existing shareholders or third parties. This allows shareholders to sell their shares or for companies to be bought and sold.

Examples of Transfer of Shares:

Transfer  to existing shareholders
Transfer to third parties
Succession Planning
Share for Share Exchange
Company Takeover
Company Restructuring

A potential transfer can be rejected by the board of directors if it is deemed to be not in the best interests of the company or oppressive to the rights of other shareholders. Again, the Memorandum & Articles of Association and shareholder agreements should be reviewed first.

Stamp duty is calculated at 1% of the total consideration paid or the market value for the shares and is paid using Revenue’s ROS system If the value of the consideration or the market value of the shares is less than €1,000, the stock transfer form does not have to be stamped. 

The Company should then write up the Register of Members and Register of Transfers and issue a new share certificate. 

The old share certificates must be cancelled and new certificates issued under the company seal of the company.

An indemnity is completed for lost share certificates.

The share transfer is subsequently recorded in the companies’ next annual return. 

The Stock Transfer form must be accompanies by Form SD4 enable the Revenue Commissioners to assess the market value of the shares being transferred. This may be accompanied by a set of the companies management accounts or previous years accounts. 

  
If the considered value of the share transfer is less than €1,000 and the transfer is between persons not related by blood or marriage it is not necessary to submit the documents to the Revenue Commissioners for stamping. However the share transfer documents should be kept to be recorded in the next annual return. 

This form allows them to make an assessment of the value of the shares being transferred and ensure that the correct duty is being paid.