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The Share Transfer Form (also called the Share Transfer Instrument) is a standard document required for the transfer of shares in a company.
It details the particulars of the party selling or transferring (the transferor) their shares to another (the transferee), the amount of shares to be transferred, the cost or value of each share, the company whose shares are transferred etc.
Shares are fixed identifiable units of capital that represents a member's stake in a company. Once a party holds shares in a company, that party becomes a member of the company with the right to transfer and transmit the shares. Note that before a party can make this transfer, that party must hold shares in that company and can not transfer more than it has.
The two major classes of shares that can be transferred are as follows:
This document can only be used by the following companies:
Note that this document can not be used by a company limited by guarantee as the company is not authorized to issue shares.
How to use this document
This document is used by a party who intends to transfer their shares in a company to another party. The party transferring its shares could be a company, a person or a business name.
After filling this form, the transferor and the transferee(s) must sign this document. If either of the parties is a company, its company seal must be affixed on the document and either two directors or one director and one secretary must sign the document. Where either of the parties is a person, the person must sign and the signature attested to by one witness who must enter his/her particulars (name, address, occupation of the witness) and sign the document. Where either party is a business name, the authorized representative of the business name (for example, a Partner in a partnership business, a Manager etc.) must sign and the signature must be attested to by one witness who will enter its particulars (name, address, occupation of the witness) and sign the document.
After this, the transferor must lodge this document and its original share certificate to the company whose shares has been transferred to acknowledge the transfer.
After this is done, the company must file this document at the Corporate Affairs Commission (which is the regulatory body), together with a board resolution authorizing the transfer and a completed Form CAC 2A (Return of Allotment).
The Companies and Allied Matters Act is applicable to this document. Also, the general principles of contract applies to the document.
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