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Share Transfer Form Fill out the template

Share Transfer Form

Last revision
Last revision 03/04/2019
Formats
Formats Word and PDF
Size
Size 1 to 2 pages
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Last revision: 03/04/2019

Size: 1 to 2 pages

Available formats: Word and PDF

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Share Transfer Form

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:

  • Ordinary shares: This type of shares rank lower in priority than preference shares as ordinary share holders do not receive a fixed sum of money (to be paid as dividends) by the company and in the event that the company winds up, preference share holders are paid first before ordinary shareholders.
  • Preference shares: This type of shares entitles the holder to a fixed dividend and whose payment takes priority over the ordinary shares dividends.

This document can only be used by the following companies:

  • Private Company Limited by Shares. This is the most common type of company. The liability of the members is limited by the shares the shareholders hold in the company which remains unpaid. What this means is that in the event of winding up, the members are only liable to pay such amount of unpaid shares (if any). The membership of the company is between 2-50 members. That is the members of this company must not exceed 50. The articles of association of this company must restrict the transfer of shares of the members of the company. Also, this type of company does not offer its shares to the members of the public. The name of the company must end with "Limited".
  • Public Company Limited by Shares. This is similar to the private company limited by shares but it can invite the members of the public to subscribe to its shares (that may be listed on the Nigerian Stock Exchange). There is no limit to the membership of the company. The name of the company must end with "PLC".
  • Unlimited Liability Companies. An unlimited liability company is a company that has no restriction on the responsibility of the members of the company. Consequently, members of an unlimited liability company will be held responsible for all the debts of the company until the debts are fully paid and there is no extent of liability. The name of the company must end with "Unlimited".

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).


Applicable law

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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