Share Transfer And Buy Back Flashcards
Leg regarding where dividends are paid from
S830- distributable profits
Who decides size of dividend payment
Ordinary resolution shareholders but must not exceed directors recommended amount
Need a bord recommendation of amount
What happens to shares on death
Automatically transfer to PR who can get dividends but not vote
Can transfer them to a third party
How much is Stamp duty on stock transfer
0.5% of cost unless cost is under £1000, rounded to nearest £5
When must stamp duty on stock transfer be paid
Before registering
Within 28 days
When can shares be transferred
Anytime as long as not restricted by articles
Notifying CH about stock transfer
Once a year using form CS01
Steps to transfer stock
- Seller executed stock transfer
2 buyer considers forms and certificates - Purchaser must pay stamp duty, register and issue certificate
Buy back of small amount of shares
Cash
Must not exceed the lower of £15,000 or 5% of company capital in financial year
Articles must allow this
Need ordinary SH resolution
What happens once shares are bought back
S706- bought back shares are treated as cancelled and cease to exist
When can shares be bought back from distributable profits
S690- if articles don’t prohibit it
S690(2) shares must be fully paid up
S691(2)- when shares are bought they must be paid for at time of purchase
How are shares bought back using distributable profits
Ordinary SH resolution or Written resolution
Contract must be available to inspect 15 days before GM and at GM or accompany written resolution
If approved have second board meeting to pass a resolution to enter into contract to buy
Form SH03 and form SH06 within 28 days
Forms for buy back of shares out of distributable profits
SH03- purchase of own shares
SH06- notice of cancellation of shares
Within 28 days
What is reduction of capital
When a private limited company reclassifies some share capital as distributable profits
Conditions to buy back shares out of share capital
Special SH resolution
If resolutions wouldn’t have been passed without votes relating to said shares the resolution will be ineffective
Auditors report and directors statement available at GM or sent with written resolution
Within 1 week put notice in London gazette and national newspaper
SH having shares bought back cannot participate in WR
