How to transfer shares in a company?

It is very common to transfer shares in the company by a shareholder nowaday, it is rather very easy and straight forward.

All you need to do is to inform the company secretary of your company that you would like to transfer your shares to another person.

Upon receipt your intention of share transfer, your company secretary will need to gather the following information or documents from you:

  1. How many shares you want to transfer?
  2. Who do you want the shares to be transferred to?
  3. Will the transfer of shares be allowed & approved by the board of directors?

Documents needed to transfer shares

Once your company secretary has obtained all the necessary details from you, he/she will then prepare the following documents for the execution of all relevant parties (transferror, transferee & board of directors):

  1. Share Transfer Form (Form 32A)
  2. Board’s resolution to approve the transfer of shares

You will need to pay the service charges for effecting the exercise & relevant stamp duty to Inland Revenue Board (LHDN) for the transfer of shares.

Even though you may get all above documents signed & returned back to your company secretary, it is still not effective until the Transfer Form has been stamped by the Stamping Office (LHDN).

How to calculate the stamp duty for share transfer

The rate of stamp duty for all stocks, shares or marketable securities is RM3 per RM1,000 or part therof.

The valuation of shares are normally calculated based on the following:

  1. Par value of the share (normally is RM1.00 each)
  2. Shareholders’ Fund in the Audited Accounts over the number of shares

The higher value of the shares will be applied in calculating the relevant stamp duty.

For example:

A company is having 100,000 ordinary shares with its par value at RM1.00 each.

That company is having total shareholders’ fund of RM450,000 as at the end of last year.

The calculation of the share’s value will be as follows:

  1. Par Value = RM1.00
  2. Actual Value = RM4.50  (Shareholders’ Fund divided by total shares)

The stamp duty for transfer of 50,000 ordinary shares will be as follows:

50,000 X RM4.50 divided by 1000 x RM3 = RM675