Stock Transfer

Transferring ownership of a corporation is easy: shareholders simply sell their stock to others. Some founders, however, want to restrict the transferability of their stock and so choose to operate as a privately-held corporationCorporation that restricts the transferability of its stock..

To initiate a transfer you need to sign a demat instruction slip (similar to a cheque leaf), which the DP will give you, and submit it back to the DP with complete details such as the date of transfer, scrip name, quantity, international security identification number (ISIN), recipient's DP name and ID.

Follow the corporation's explicit stock transfer processes. Draft an agreement for the stock transfer. Execute the agreement then attain consideration. Record the transfer in the stock ledger of the corporation. Prepare to consent to an S corporation election.

One stock represents one piece of ownership in the corporation.Voting rights allow the owner to control a portion of the company through ownership. By transferring stock ownership from one individual to another individual, you will successful transfer ownership in the corporation.

Be sure the purchaser is eligible. Being taxed as an S corp. Review the shareholders' agreement and bylaws. You can find your company's restrictions on stock transfers in its shareholders' agreement or bylaws. Determine the stock's value. Prepare and execute a stock transfer agreement. Update corporate records.

Print the "Stock Transfer Form," fill it out in its entirety, and endorse the stock certificates. You'll also have to obtain a medallion guarantee from an approved financial institution. Once you're satisfied that you filled everything out correctly, mail the stock transfer form and the stock certificates to the agent.

Request a Transfer of Stock Ownership form from your stockbroker or directly from the brokerage company. Write a letter with the instructions on the means of transfer to include with your Transfer of Stock Ownership form.

Quite often, a shareholder (who may also be a founder) wishes to gift his or her shares to another shareholder (who may also be a co-founder), or to a family member of his. The good news is that there is no Capital Gains Tax on gifts of assets (including shares) you give to your spouse or civil partner.

Because the corporation has a legal life separate from the lives of its owners, it can (at least in theory) exist forever. Transferring ownership of a corporation is easy: shareholders simply sell their stock to others.