Depending on the reason for transferring stock, there may be different documents required to initiate the transfer. While the transfer of shares is not difficult, many people have questions about what they should do. Shares in a company are often transferred by private agreement between the seller and the buyer. Even though specific requirements for transferring shares may differ, there are some general guidelines required by most guarantors.
Complete all sections of the Stock Transfer Form. The form is available from HM Revenue and Customs (see references and resources). You should complete Certificate 1 if the consideration you give for the shares is £1,000 or less. You should complete Certificate 2 if the transfer is otherwise exempt from Stamp Duty and you are not claiming a relief, or the consideration given is not chargeable consideration. Most banks and brokers also require a letter of instruction describing how you want the shares transferred.
Indicate the number of shares to be transferred, as well as the name of the company that holds the stock you want to transfer.
Date the Stock Transfer Form. Include your address and National Insurance number. List the name, address and National Insurance number of the new owner.
Sign your name on the back of the original stock certificate exactly as it appears on the account, (or on the front of the stock certificate). Depending on the number of shares being transferred, the signature(s) of the owner(s) may have to be Guaranteed.
Submit the Stock Transfer Form request along with the original stock certificates. Other forms may be required.
Provide a copy of the first page and signature page of the living trust document when transferring shares to a living trust. If transferring shares from a custodian account, the custodian must sign the letter of instruction for a minor. Indicate that you are acting in the capacity of a custodian. A photocopy of the death certificate is required when transferring shares where one owner is deceased.
Keep a copy of all the documents submitted for your own financial records.
Send stock certificates and any other documents by registered mail. Follow the transfer agent's mailing instructions. Include a daytime telephone number where you can be reached in case there are any questions.
Insure stock certificates for 2 per cent of the market value of the shares before mailing in order to cover the cost of replacing the bonds should they be lost in the post.
A legally authorised person can sign for a registered owner. A Guarantee is a signature guaranteed by a financial institution or brokerage firm.
Tips and warnings
- A legally authorised person can sign for a registered owner.
- A Guarantee is a signature guaranteed by a financial institution or brokerage firm.