Transfer of Shares in UK Law

Leading Cases
  • Ebrahimi v Westbourne Galleries Ltd; Re Westbourne Galleries Ltd
    • House of Lords
    • 03 May 1972

    It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way.

    The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements—(i) an association formed or continued on the basis of a personal relationship, involving mutual confidence—this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be "sleeping" members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members' interest in the company—so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.

    But the expressions may be confusing if they obscure, or deny, the fact that the parties (possibly former partners) are now co-members in a company, who have accepted, in law, new obligations. A company, however small, however domestic, is a company not a partnership or even a quasi-partnership and it is through the just and equitable clause that obligations, common to partnership relations, may come in.

  • Lyle & Scott Ltd v Scott's Trustees
    • House of Lords
    • 18 Jun 1959

    I have come to the conclusion without difficutly that on their own admissions the Respondents are in breach of Article 9. The purpose of the Article is plain: to prevent sales of shares to strangers so long as other members of the Company are willing to buy them at a price prescribed by the Article. And this is a perfectly legitimate restriction in a private company.

    I see no reason for reading the Article in that limited way. Transferring a share involves a series of steps, first an agreement to sell, then the execution of a deed of transfer and finally the registration of the transfer. Moreover the ordinary meaning of "transfer" is simply to hand over or part with something, and a shareholder who agrees to sell is parting with something. The context must determine in what sense the word is used.

  • Jobson v Johnson
    • Court of Appeal (Civil Division)
    • 25 May 1988

    In principle, a transaction must be just as objectionable and unconscionable in the eyes of equity if it requires a transfer of property by way of penalty on a default in paying money as if it requires a payment of an extra, or excessive, sum of money. In each case the clause ought to be unenforceable in equity in so far as it is a penalty clause.

  • O'Neill v Phillips
    • House of Lords
    • 20 May 1999

    The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.

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Books & Journal Articles
  • Comment: Legal Issues regarding the NBE Guideline on Diaspora-Owned Shares in Banks
    • Núm. 11-2, Julio 2017
    • Mizan Law Review
    • Tameru Wondim Agegnehu
    • Tameru Wondim Agegnehu: LL.B, (Haile Selassie I University, currently Addis Ababa University, 1972), LL.M (University of Manchester, 1981), former Vice President of the Supreme Court, and currently Attorney & Consultant at Law, Email: tameruw@yahoo.com
    • 404-409
    This comment examines the legality of Guideline No. FIS/01/2016 issued by the National Bank of Ethiopia (on November 1st, 2016) regarding the relinquishing of shares in banks owned by foreign natio...
    ......) are clearly the shareholders in whose name the shares were registered, and in effect, they are entitled to the premiums obtained during the transfer of shares by auction. If the initial acquisition of shares is considered improper, ‘two wrongs don’t make a right’ and thus, the proper ......
  • European Company Law and the Netherlands: The Insider Dealing Problem. A Probatio Diabolica?
    • Núm. 3-3, Septiembre 1996
    • Maastricht Journal of European and Comparative Law
    ......: all market players participating in transactions of 'transferable securities' should be subject to equal conditions. None of the ... crime - gaining individual profit from a transfer of shares on the basis of information which has not been made public - this ......
  • The European Private Company? Maastricht, 7 – 8 April 1995
    • Núm. 1-3, Septiembre 1994
    • Maastricht Journal of European and Comparative Law
    ...... countries private companies are obliged to restrict the transfer of shares (the Netherlands, France, Belgium), while in other ......
  • Legal Aspects of Stock Market Development in Ethiopia: Comments on Challenges and Prospects
    • Núm. 8-2, Julio 2014
    • Mizan Law Review
    • JE Chewaka
    • LLB, LLM, Lecturer of Law at the University of Gondar School of Law. Email: jetulaw@gmail.com. The writer is grateful to Professor Tilahun Teshome for encouraging and supporting me to write on this issue.
    • 439-454
    Ethiopia lacks the institutional and legal frameworks that regulate the market for stock exchange, and in effect, the current stock trading activity may grow into a largely unregulated space in whi...
    ...... under formation and investors in existing companies sell and transfer their shares to third parties giving rise to the availability of tradable ......
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Law Firm Commentaries
  • What UK tax measures and announcements have been made to date?
    • LexBlog United Kingdom
    This note provides a more detailed look at what tax measures and announcements have been made to date covering: VAT, self assessment income tax, time to pay, non-statutory clearances, pension schem...
    ......, pension schemes, statutory residence test, stamp duty (transfer of shares and applications for group relief). It also highlights other ......
  • TUPE transfer after a share purchase
    • JD Supra United Kingdom
    It is generally accepted that the TUPE Regulations will not apply to a transfer of shares. This is because there is no change in identity of the employer following a share sale. All rights, duties ...
    .... . It is generally accepted that the TUPE Regulations will not apply to a transfer of shares. This is because there is no change in identity of the employer following a share sale. All rights, duties and liabilities in connection with the ......
  • An End To Cancellation Schemes In Takeovers
    • Mondaq UK
    ......Cancellation schemes involved cancelling the target's shares through a reduction of capital and reissuing new shares in the target to ... bidder, so avoiding the stamp duty that would usually arise on a transfer of shares. The Chancellor's Autumn Statement announced the end of ......
  • Public Company Update - May 2013
    • Mondaq United Kingdom
    ...... with regard to the proposed abolition of stamp taxes on the transfer of shares in companies quoted on growth markets such as AIM. This change ......
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