When forming a corporation, the corporation’s shares are distributed amongst its shareholders. Those shares are usually transferable unless the Articles of Incorporation, Shareholder Agreement, or Bylaws of the corporation place restrictions on the transfer of shares.
The following are basic steps that can assist with transferring the shares of a corporation:
- Review Articles of Incorporation, Shareholder Agreements, or Bylaws to see if there are any restrictions around share transfers.
- Prepare a share transfer agreement.
- Have a board meeting to approve the transfer.
- Prepare a corporate resolution authorizing the transfer of shares.
- Prepare and issue new share certificates.
Be aware that there are tax implications for transferring shares. The transfer may be considered a taxable event, so it is recommended to consult an accountant about possible tax implications.