1) Resolution of the Company's Board of Directors
- The board of directors generally needs to pass a resolution to approve the transfer of shares.
- This resolution shall be recorded in the minutes of the board of directors' meeting.
- The articles of incorporation of the company being transferred, or the most recent annual return (NAR1) filed with the Registrar of Companies
- These documents may be required to verify the holders of company shares and their authority.
- If the company is currently in operation, it must provide its most recent audited financial statements; if the date of the audited financial statements is more than six months prior to the transfer date, it must provide management financial statements covering the period from the date of the audited financial statements to no more than three months prior to the transfer date.
- Tax authorities generally use the net assets reported on financial statements as a reference for calculating stamp duty.
4) Share Transfer Form (Instrument of Transfer)
- This is a legal document used to document the transfer of shares from the transferor (seller) to the transferee (buyer).
It must be signed by the transferor and the transferee.
5) Application for Stock Transfer (Bought and Sold Note)
- Used to record the specific details of stock transactions, including the number of shares, the price, and the date of transfer.
6) New Stock Certificate
- Upon completion of the share transfer, the company must issue new stock certificates to the new shareholders.
7) Old stock certificates
- The transferee is generally required to return the original stock certificate so that it can be canceled.
8) Stamp Duty
- Stamp duty is payable on the transfer of shares; typically, each party is required to pay 0.13% of the company’s net assets (totaling 0.26%) and a fee of HK$5 per share transfer form.
- This must be processed and paid at the Inland Revenue Department in Hong Kong.
9) Update the company's shareholder register
- The company secretary is required to update the company’s shareholder register to reflect the latest changes in shareholder status (the register must be updated within two months after a share transfer becomes effective).
10) Notify the Company Registry
- Although the transfer of shares does not need to be filed directly with the Companies Registry, the company must update its shareholder information in its next Annual Return (NAR1).