There are a number of circumstances in which Shares in a company may be transferred, the most common of which are upon a sale of the shares or by a gift of the shares. Other circumstances include a transfer of shares upon the granting or enforcement of security or their transmission by operation of law (eg where the death or bankruptcy of a shareholder has occurred). For more information about the transmission of shares, see Q&A: Can personal representatives transfer shares in a company without a grant of probate?
It is most common for shares to be transferred upon a sale. A sale of shares will normally take place pursuant to the terms of a share purchase agreement or an option agreement.
A company may also buy back its own shares. For further information on Share Buybacks, see Practice Note: How to carry out a share buyback.
This fundamental notes focuses on the transfer of the title to certificated shares upon a sale that is not a share buyback.
What are certificated shares and uncertificated shares?
Shares in a company
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Shares definition
What does Shares mean?
The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.
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