A company with share capital (a portion of a company’s equity obtained by the issue of shares to a shareholder) may transfer company shares.
Additionally, different types of companies have varying rights to transfer shares. Specifically, proprietary companies have limited rights to transfer shares. Check out our article on the differences between companies here.
Shares
A Proprietary company is not able to utilise the ASX as a platform to sell their shares. A person becomes a shareholder (referred to as a member in legislation) if they a specified in the registration form, pursuant to s117(k). In which case the shares allotted to them will be issued to them on the registration of the company.
Issuing
This involves the creation of new shares that are then granted to the proposed shareholder. Once the transaction is complete the shareholder should then be given a share certificate, which is a document that acts as legal proof of the shareholder’s ownership of the shares.
Becoming a shareholder
A person can become a company shareholder in several ways:
- The person being listed as a shareholder of the company in the application for registration of the company.
- The company issues shares to the person.
- The person buying shares in the company from an existing shareholder and the company registering the transfer.
Additionally, a person can case to be a shareholder by:
- Selling all of their shares in the company and the company registers the transfer of shares.
- The company buys back all the person’s shares.
- ASIC cancels the company’s registration.
Transferring company shares via ASIC Online
You can transfer company shares between shareholders via the Australian Securities and Investments Commission (ASIC) online portal. However, if you do not have an ASIC online account, you will need to register for online access.
After logging in to the ASIC website, you can transfer company shares by:
- Firstly, selecting ‘Start a new form’ from the left-hand side menu.
- Secondly, select ‘Changes to company details’ from the list of presented forms.
- Thirdly, select ‘Change to members register’ from the list of changes
- Fourthly, select the type of change you are making to the member register
- Then, remove shares from an existing shareholder by selecting ‘Change or ‘Cease.
- Finally, add shares to an existing shareholder by selecting ‘Change or add them to a new shareholder by selecting ‘Add a new member to the register’.
Additionally, once you have completed the above steps make sure to review the changes and then complete the subsequent declaration to submit your transaction. Following the completion of the declaration press ‘Submit’.
