"Issuing" and "transferring" shares sound similar but are legally different, and getting the steps right matters for ownership, tax and Companies House compliance. Issuing (allotting) creates new shares; transferring moves existing shares from one person to another. Here is how each works for a private company in England and Wales under the Companies Act 2006.
Issuing (allotting) new shares
When a company allots new shares, it creates new shares and issues them to a shareholder (often to raise capital). The key steps:
- Check authority. The directors need authority to allot. For a private company with one class of shares, directors can usually allot unless the articles restrict it; otherwise authority may be needed from the members (Companies Act 2006).
- Pre-emption rights. Statutory pre-emption rights (Companies Act 2006, s 561) generally apply where equity securities are allotted for cash, subject to exceptions. Where they apply, existing shareholders must be offered the shares pro rata first, unless pre-emption is disapplied by the articles or by special resolution. Contractual or article-based pre-emption rights may also apply more widely, check the articles and any shareholders' agreement.
- Pass any required resolutions and decide the price and terms.
- Update the registers, enter the new shareholder in the register of members and issue share certificates within two months of the allotment.
- File a return of allotment, submit form SH01 to Companies House within one month, and update PSC information if control changes.
Transferring existing shares
A transfer moves shares that already exist from a seller to a buyer (or as a gift). The steps:
- Check restrictions. The articles or a shareholders' agreement may contain pre-emption rights or require board approval, check before agreeing a transfer.
- Complete a stock transfer form (J30) signed by the transferor, recording the shares and any consideration.
- Stamp duty. If the consideration is more than £1,000, the form must be sent to HMRC for stamping and 0.5% Stamp Duty is payable (rounded up to the nearest £5). Transfers of £1,000 or less are generally exempt (with a certificate).
- Board approval and registration. The directors approve the transfer (subject to any discretion in the articles), enter the new owner in the register of members, and issue a new share certificate within two months of the transfer.
- Report at the next confirmation statement, unlike allotments, a transfer does not have its own Companies House form; the change is reflected in the company's confirmation statement.
Don't forget tax
- For the buyer/transferee: stamp duty on transfers over £1,000.
- For the seller: potential Capital Gains Tax on any gain.
- For share allotments to employees/directors, special employment-related securities tax rules can apply, take advice.
Key takeaways
- Allotment creates new shares (check directors' authority and pre-emption; file SH01 within a month).
- Transfer moves existing shares (use a stock transfer form J30; 0.5% stamp duty if consideration over £1,000; update the register).
- Always check the articles and any shareholders' agreement for restrictions and pre-emption.
- Mind the tax consequences (stamp duty, CGT, and employee-share rules).
Sources
- Companies Act 2006 (allotment of shares; pre-emption rights, s 561; registers and SH01)
- Stock transfer form (J30) and Stamp Duty on shares (0.5% over £1,000)
- Tax rules on share disposals (CGT) and employment-related securities
--- This article is general information about the law of England & Wales as at 2026, not legal or tax advice. For advice on your circumstances, consult a qualified solicitor or accountant.