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Selling shares in a private limited company

| Duncan & Toplis | 20 October 2020

Selling the shares of a private limited company can be hugely beneficial to the company selling shares and the party buying them.

A company might choose to sell shares as a way of raising capital for the business without making repayments or paying interest on loans from a bank.

A private limited company can issue shares in return for an investment in the business. This might be from a family member, friend, business associate or through formal equity finance investors. 

Our team of experts are able to act on behalf of both buyers and sellers of shares and can provide useful advice and guidance.

If you’re buying shares

Buying shares of a company can bring financial rewards and other benefits such as a level of influence or control in a company as a shareholder or part-owner, although it also carries a level of risk.

Shareholders receive a portion of profits according to the percentage of shares they own, made in the form of dividends. Dividend payments are subject to tax over a certain amount.

Our experts have had years of experience supporting individuals who wish to purchase shares in private companies, as well as providing insights into tax implications and business advice.

If you’re selling shares

Share dealing is a complex process, so it’s important to seek professional advice before selling shares.

Once a price for shares has been agreed, a share transfer form must be completed and approved by the existing owner or owners and shareholders, which, along with a share certificate, will be provided to the new shareowner in exchange for payment.

The share register should be updated to reflect the new shareholder’s position. It’s possible that stamp duty or Capital Gains Tax will be payable on the shares so it’s best to discuss this with an adviser. 

There are a great deal of benefits that can come from selling shares of a private company for all parties, and with the assistance of advisers, the process will be simple for all involved.

 

Get in touch with our team today to ensure you’re complying with the latest legislation and tax changes when selling and buying shares.

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