Issuing Shares & Transfers UK: Company Guide 2025
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Shares sit at the heart of how a limited company is owned, funded and run. Whether you are bringing in a new investor, rewarding a key employee, restructuring ownership between family members or handing someone a stake in return for their work, the mechanics matter.
Get the paperwork wrong and you can end up with disputes over who actually owns what, problems at Companies House, or tax consequences nobody planned for. This guide walks through the two separate processes most company owners deal with at some point: issuing (allotting) brand new shares, and transferring existing shares from one person to another.
I have written it for directors and shareholders of private companies in England and Wales who want a plain-English picture of how it all fits together.
Overview
Issuing shares and transferring shares are two different things, and people mix them up constantly. Issuing (or allotting) shares means the company creates new shares that did not exist before and gives them to someone in exchange for money, assets or services.
The overall share count in the company goes up, and existing shareholders usually see their percentage holding reduced unless they take part in the issue themselves. Transferring shares, by contrast, moves existing shares from one person to another. The total number of shares stays the same, but ownership of some of them changes hands.
Both processes are governed by the Companies Act 2006, the company's own Articles of Association, and any shareholders' agreement that might be in place. Each route has its own forms, internal approvals and filing obligations with Companies House. Getting the order right matters: check the rules first, pass the right resolutions, then update the statutory registers, and only then file at Companies House.
Key steps
- Check the company's authority and rules. Before issuing a single new share, directors need to confirm they have authority to allot under the Articles or by shareholder resolution, and check whether statutory or contractual pre-emption rights apply. A shareholders' agreement may add further conditions. Skipping this step is where most problems start.
- Agree the commercial terms and approve the allotment. Decide how many shares will be issued, to whom, at what price, and of what class. The board passes a resolution approving the allotment, and shareholders pass any resolutions needed to disapply pre-emption rights or create a new share class. Keep clear minutes of every decision.
- Collect payment and update the internal registers. Once the subscriber has paid for the shares or provided the agreed consideration, update the register of members and register of allotments, and issue share certificates to the new holder. These internal records are the legal proof of ownership, not the Companies House filing.
- File the SH01 return of allotment at Companies House. Submit form SH01 within one month of the allotment, showing the new shares issued and an updated statement of capital. For share transfers, there is no SH01, but a stock transfer form (form J30 for fully paid shares) needs to be completed and, depending on value, stamped by HMRC.
- Update the next confirmation statement. Share transfers are not notified individually to Companies House, but any changes to shareholders or shareholdings must be reflected in the next confirmation statement (CS01). Keep the statutory registers current in the meantime, since they are the authoritative record of who owns the company.
Common questions
Q What is the difference between issuing shares and transferring shares?
Issuing shares means the company creates brand new shares and allots them to someone, increasing the total share count. Transferring shares moves existing shares from one owner to another without changing the total. Issuing dilutes existing shareholders unless they participate; transferring does not. Each process has its own paperwork, approvals and filing requirements, so it is worth being clear which one you actually need before you start.
Q Do directors always have authority to issue new shares?
Not automatically. For a private company with only one class of shares, directors often have authority unless the Articles restrict it. Where there are multiple share classes, or the Articles are more restrictive, directors usually need shareholder approval by ordinary resolution. Pre-emption rights under the Companies Act 2006 may also require shares to be offered to existing shareholders first, unless those rights have been disapplied.
Q What are pre-emption rights?
Pre-emption rights give existing shareholders first refusal on new shares in proportion to their current holdings, so their percentage stake is not diluted without consent. They arise under the Companies Act 2006 and are often reinforced or varied by the Articles or a shareholders' agreement. They can be disapplied by special resolution, which is common when a company wants to bring in a new investor on agreed terms.
Q How do I transfer shares in a private limited company?
The seller and buyer complete a stock transfer form (form J30 for fully paid shares) setting out the details of the transfer and the consideration. If stamp duty applies, the form goes to HMRC for stamping. The company's directors then approve the transfer, update the register of members, cancel the old share certificate and issue a new one to the buyer. The change appears in the next confirmation statement.
Q Is stamp duty payable on share transfers?
Stamp duty can apply to share transfers where the consideration is above a threshold set by HMRC. Below that threshold, the transfer is usually exempt and can be certified on the back of the stock transfer form. Check the current thresholds and rates on gov.uk, as they change from time to time. Transfers for no consideration, such as gifts, are generally exempt but still need to be properly documented.
Q What filings does Companies House need when shares are issued?
For a new allotment, file form SH01 (return of allotment of shares) within one month, including an updated statement of capital. If you have created a new share class or amended the Articles, you may also need to file the relevant resolutions and the updated Articles. Share transfers are not filed individually but are reflected in the next confirmation statement (form CS01).
Q Can shares be issued for something other than cash?
Yes. Shares can be allotted in exchange for non-cash consideration such as services, intellectual property, assets or the release of a debt owed by the company. The board should value the consideration carefully and record how it was assessed. Non-cash allotments are common in founder arrangements and acquisitions, but they can have tax consequences for the recipient, so take advice on the specific position before completing.
Sources
This guide is based on primary UK law and official guidance.
- LegislationCompanies Act 2006legislation.gov.uk
- Guidance · UK GovForm SH01: Return of allotment of sharesgov.uk
- Guidance · UK GovCompanies House: filing your confirmation statement (CS01)gov.uk
- Guidance · UK GovHMRC: stamp duty on sharesgov.uk
- Guidance · HMCTSStock transfer form (J30)gov.uk
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.