To transfer shares, the ‘transferor’ must complete and sign a stock transfer form and give it to the ‘transferee’ along with the share certificate relating to the shares. The transferee then sends the share certificate and stock transfer form to the company.
Within two months, the company must then send the transferee a new share certificate in own their name, enter their name on the register of members and notify the Registrar of Companies of the change in ownership.
An important principle of company law is the maintenance of share capital, because that capital is the fund from which debts must be paid. This means the company’s share capital cannot be reduced, and nor can paid up share capital be returned to shareholders. With some limited exceptions, shareholders’ liability on the capital they have paid cannot be reduced either.