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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
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Madam, We had recently performed a share

Resolved Question:

Dear Sir / Madam, We had recently performed a share transfer, and we want to confirm whether the transfer is valid, and if the new shareholder is the only one and if he has full ownership on the company. Also, if in case he decides to sell the company,
the previous shareholder is not in charge of any income. As we were told before, the company must keep correct records of it’s actions and of actions of directors and shareholders. Thus, we want to check if all company’s actions and activities made within
the ***** were performed and recorded as required by law, and if we do not have any outstanding resolutions of actions. By actions and activities we mean: shareholders’ resolutions, directors’ resolutions, shares transfers and fillings to Companies House. Thus,
we think It would be best if you can compare our Company’s Actions from Filling history from Companies House website, with documents that we have on hand, and check if they are corresponding. We can send all documents in electronic form. Also, We also observed
that we have made some fillings in past which contain inaccurate information: - Annual Return as at 30 May 2015 (did not indicate the director as an officer and the person who authorised the form) - Dormant accounts as at 31 May 2014 (indicated the wrong director/person
name that authorised the form) - Abbreviated accounts as at 31 May 2013 (indicated £1 of "called up share capital not paid" instead of indicating £2) Considering above information, can you please confirm whether the share transfer is valid: meaning that none
of shareholder’s and director’s actions made in past (including wrongful filled accounts and return), do not negatively affect the validity of the share transfer, and whether previous shareholder is not and will not be in charge of any income received after
the sale of the company? Kind regards *********** Director Company name: ********* ********* (UK) LIMITED Company number: *********** Business Bank Account: No Company Status: Dormant since incorporation Shareholders: we were 2 since incorporation on 30 May 2012 until
7 august 2015; and remained 1 after transferring shares since 7 august 2015; Shareholders citizenship: ******** and without work permit Financials: Our company didn't carry any financial activities since incorporation.  Tax: Not VAT registered
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Did you use an instrument transfer for example a form CON40G?
Kind regards
AJ
Customer: replied 2 years ago.
Hello, we used a J10 stock transfer form for unpaid shares.
Expert:  Alex J. replied 2 years ago.
Hi, Thank you. Have you since been paid for your shares? What are you trying to do unravel the transaction?
Customer: replied 2 years ago.
Hello,we were two shareholders initially, when company was incorporated. None of thus deposited funds for the shares. And after 3 years (the company was dormant) we decided to make a share transfer, and as one shareholder will get all the shares.
Expert:  Alex J. replied 2 years ago.
Hi
Thank you.
So to clarify are you trying to set the company up so it has a single shareholder?
Kind regards
AJ
Customer: replied 2 years ago.
Yes
Customer: replied 2 years ago.
We use a share transfer form J10 for the procedure
Expert:  Alex J. replied 2 years ago.
Hi
Thank you.
If you transferred unpaid shares to a new shareholder and the new shareholder has accepted them it will be responsibility of that shareholder to pay for the shares if there is a call on them.
Are you concerned that you will have a contingent liability?
Kind regards
AJ
Customer: replied 2 years ago.
Thank you. We concern about how the past filling to Companies House can affect our last share transfer validity. We filled some unaccurate accounts and annual returns: (Annual Return as at 30 May 2015 (did not indicate the director as an officer and the person who authorised the form) - Dormant accounts as at 31 May 2014 (indicated the wrong director/person name that authorised the form) - Abbreviated accounts as at 31 May 2013 (indicated £1 of "called up share capital not paid" instead of indicating £2).Also, we did not notify Companies House of a director appointment and removal.
Thus, we concern whether those actions did not affect the validity of the share transfer, and that it is not necessary to file amending documents to Companies House for making the share transfer valid
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
This wont affect the validity of the share transfer. Companies House is just an administrative record, if you have filed information incorrectly then you need to apply to Companies House to correct it. Filing incorrect information will generally only cause a serious issue (i.e a fine for the directors) if the company is insolvent.
As not notifying them of the director changes, you can back date any form TM01s (director removal forms) to the correct date, and again you are only likely to be fined if the company is insolvent or someone has been prejudiced as a result.
Kind regards
AJ
Customer: replied 2 years ago.
Thank you for your answer.
Regarding share transfer procedure, can you suggest us if we managed it right?
We completed a share transfer form J10, cancelled old share certificates and issued new ones. Did not pay any stamp duty as the consideration was NIL.Was it obligatory to authorise the transfer with a solicitor, notary or a witness?Is the share certificate valid if being signed only by the company director? Without secretary and without company seal?
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
The share transfer does not require a witness notary or signatory.
The share certificate is only evidence of ownership - ideally it should be signed by the secretary as well (or another director) - but this does not invalidate the share transfer.
Kind regards
AJ
Customer: replied 2 years ago.
Thanks, ***** ***** the share certificate is signed only by a director than it is not valid?
Expert:  Alex J. replied 2 years ago.
The share transfer is still valid, the share certificate may not be completely valid until it is sign by two parties (if required) - the share certificate is only evidence of ownership of the shares. It is not an absolute requirement that you have to have a share certificate to own shares.
Expert:  Alex J. replied 2 years ago.
Kind regards AJ
Customer: replied 2 years ago.
Thanks Alex, we are better now. Can you also advice us on how to write a best SPA (share purchase agreement) and a agency agreement of selling shares?
Customer: replied 2 years ago.
Maybe, you have a good template or draft for that.
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
I am afraid I cannot draft documents on this site. There are sites like Simply Docs that may have precedents, but if you want a share purchase agreement i would recommend visiting a local solicitor. You will need to be advised on what warranties you will give/receive and also a firm of solicitors will have the benefit of indemnity insurance should anything go wrong.
I can answer any other questions on share sales generally.
Kind regards
AJ
Customer: replied 2 years ago.
Regarding share certificates, can a person (shareholder) sign the certificate as a director and as a secretary?Also, if the consideration for shares is high, eg. £1M, than it is also not required to authorize with notary/solicitor?And is it legal to receive money for shares to a foreign bank account? Or it should be UK bank account?Kind regards
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you.
If the share certificate has a space for a director and secretary to sign, it would be preferable if different people could sign it.
The value of the share transfer does not mean you require a notary or solicitor.
The proceeds can come from a foreign bank, but you need to satisfy yourself that they come from seller directly - also your bank may make inquiries before receiving a large sum from a foreign bank account.
Kind regards AJ
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Customer: replied 2 years ago.
Thank you for your answers. If we need more information we will contact you.