When you first form a limited company, the formation agent will arrange the issue of the Subscriber Shares.
Following that you can allocate new shares using Form 88(2)
Before the Companies Act 2006 companies had authorised share capital so before issuing shares:
- Check the Memorandum and Articles
- Check any Shareholder agreements
As your company grows, the shareholders may need to transfer shares to new shareholders. To do this you need to:
- Complete a Stock Transfer Form(you can create your own form or use the link below)
- Check if Stamp Duty is payable (over £1000) and how muchhttp://www.hmrc.gov.uk/sd/shares/sharetransfers.htmhttp://sdccalculator.hmrc.gov.uk/SDCDefault.aspx
- Prepare a Board Minute approving the Transfer
- Cancel the old share certificate and issue a new one http://www.company-wizard.co.uk/resources/share_certificate.aspx
- Update the Company Registers
- Inform Companies House on the next Annual Return (you can only tell companies house who the shareholders are on an annual return so it could be a while before companies house get to know the the shareholders have changed)
- Your Bank and Professional Advisers will need information on changes to Shareholders
- Don’t forget Form 42 if the shares are employee (Director) related http://www.hmrc.gov.uk/shareschemes/form42-2012.pdfhttp://www.hmrc.gov.uk/shareschemes/form42-guidance-2007.pdf
Your shareholders need to be aware that if they give away shares or make a gain from selling shares they may be liable for Capital Gains Tax, however, they may be entitled to tax relief like the Entrepreneurs Tax Relief and that each year there is an exempt amount of capital gains for individuals.
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