How to transfer Shares in a company

How to transfer Shares in a company

July 23, 2019

What is share capital?

It is the company’s capital which is divided among the owners of the company and entitles them to profits. Shares are transferable assets of a shareholder to one or more persons as he desires.

Share transfer occurs where a shareholder conveys or transfers his shares in a Company to another person or persons.

Where a shareholder transfers all his shares to only one transferee;

The person transferring is usually known as the transferor while the person purchasing is known as the transferee.

  1. An instrument of transfer will be duly executed by both parties
  2. The instrument of transfer will be registered in the company
  3. Form CAC 2A will be filed at the corporate affairs commission alongside a special resolution by the company for registration.
  4. Upon filing at the Corporate Affairs Commission, the share transfer is effective and a new share certificate is issued to the transferee by the company and his name entered into the register of members.

Where transferor Transfers part or all of his shares to more than transferee;

  1. The transferor will execute the instrument of transfer
  2. The transferor will send his certificate and the instrument of share transfer to the company for registration.
  3. The company will endorse on the instrument the words “Certificate Lodged” and the endorsed instrument is then sent to the purchase.
  4. The transferee(s) will executes and send back the endorsed instrument of transfer to the Company for registration.
  5. New share certificates will be issued to the respective transferees and their names entered in the register of members.
  6. The change in the shareholding structure of the Company will be effected at the Corporate Affairs Commission by filing Form CAC2A and a special resolution of the company to that effect.

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