How do I transfer shares from one director to another?

If you are a sole proprietor, you can transfer shares by providing the new director with a copy of your corporation’s shareholder’s agreement and a list of directors and officers.

If you are a partnership, you can transfer shares by providing the new director with a copy of your partnership agreement and a list of the partners and partners’ respective shares.

General Requirements

  • Memorandum and Articles of Association of the company (for the companies which the directors have not resolved to adopt the model articles of association as provided for by the company’s act 2015)Copy of Certificate of IncorporationThe company must have filled all its annual returns for the previous years with the registrar of companies.In addition, the company must file interim returns (for part of the current incomplete year).Obtain minutes for the meeting in which the resignation (of outgoing) and appointment (of incoming) director(s) were discussed.File CR 19 (notice of special/ordinary resolution required by companies act to be lodged with registrar)

Requirements for Incoming Director(s)

  • Obtain consent from the person(s) being appointed as director(s).Obtain the residential address of the new director and file CR 8 (Notice for residential address/change of address of director(s) of company)Obtain copies of PIN, National ID or Passport and passport size photo for the new directorial CR 6 (Notice for appointment of new director(s) and their particulars.

Requirements for Outgoing Director

  • Obtain written resignation letter from the outgoing director (s)File CR 9 (Notice of cessation of office of directors)Obtain an affidavit indicating that you are willingly resigning as director(s) and transferring your interest to another director(s).

Transfer of Shareholding

  • The parties involved i.e. the outgoing director(s)/transferor(s) and incoming director(s)/transferee(s) should sign a transfer deed (Form of transfer).The company secretary will then assess the stamp duty and have the transfer lodged (registered) at the Registrar of Companies.

Confirmation of the Transfer

Once the changes have been effected successfully, the company Secretary requests for the new list of director(s) and their shareholding by obtaining the CR 12 from the company’s registry.The new list of directors and their shareholding will be available at the registry.

Filing of Annual Return and Interim Return

The company secretary will file the annual return and interim return after the transfer is confirmed by the registrar of companies.The interim return must be filed within 10 days of the date of resignation of the outgoing director(s).

Information on Directorships

The company secretary will maintain a register of directorships for the directors of the company.This register will be updated whenever a director resigns or is removed from office.