𝗦𝗵𝗮𝗿𝗲 𝘁𝗿𝗮𝗻𝘀𝗳𝗲𝗿𝘀 in UK companies

In the course of my 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘀𝗲𝗰𝗿𝗲𝘁𝗮𝗿𝗶𝗮𝗹 consulting career in the UK, I've reviewed a lot of paperwork relating to share transfers.

• Here are some of the most common mistakes I've come across:

• Disregarding the requirements applicable to not fully paid shares;

• Omitting to check the 𝗰𝗼𝗺𝗽𝗮𝗻𝘆'𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲𝘀 for any specific provisions;

• Where stamp duty is payable, approving the transfer before a duly stamped stock transfer form is returned to the company, in clear breach of Section 770 of the 𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗔𝗰𝘁;

• Where a share transfer agreement exists, failing to review its specific provisions;

• Disregarding any pre-emptive rights, where applicable.

Whilst transferring shares may appear a simple administrative exercise to some, the prerequisites to check before a company's directors can approve a transfer are many and of 𝗽𝗮𝗿𝗮𝗺𝗼𝘂𝗻𝘁 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝗰𝗲. So much so that, in an obvious attempt to cut costs and go for the DIY route, what seems like a cheap approach may end up formalising a completely 👉 void transaction 👈 .

Directors generally focus on running the company and rely on their advisors for compliance matters. So, it is even more striking when those advisors have failed to spot those prerequisites, as this amounts to exposing the directors to unnecessary compliance risks, as well as opening the door to potential disputes in court.

Better safe than sorry is therefore the motto anyone would better follow when it comes to company legal transactions. And company secretarial is definitely one of those areas where that motto applies.

I've been fortunate enough to be entrusted with overseeing a great deal of 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝘀𝗲𝗰𝗿𝗲𝘁𝗮𝗿𝗶𝗮𝗹 𝗽𝗮𝗽𝗲𝗿𝘄𝗼𝗿𝗸, as well as collaborating with legal and accounting teams on complex 𝗱𝘂𝗲 𝗱𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 cases.

It is always a pleasure to help clients by bringing in specialist ad hoc support that goes above and beyond standard support.

Clients do not need standard support, they deserve bespoke attention, even more so where their client’s companies have several shareholders or complex structures!

I hope you have found this article interesting.

Find more articles like this on this website or connect with me if you have a company secretarial transaction you'd like to discuss with a professional.

Alessandro Bolasco

Owner

Bolasco Company Compliance Ltd

#CompanySecretarial #CompanySecretary #ShareTransfers #CompaniesAct #ICAEW #ACCA #UKAccounting