assignment of shares to

Stock Assignment: Transferring Ownership Rights with Stock Power

1. introduction to stock assignment and stock power, 2. understanding ownership rights in stock, 3. the role of stock power in transferring ownership, 4. ways to obtain stock power, 5. filling out a stock power form, 6. executing a stock assignment, 7. legal considerations in stock assignment, 8. common mistakes to avoid in stock assignment, 9. conclusion and final thoughts on stock power and stock assignment.

Stock Assignment and Stock Power are two terms that are commonly used in the world of stocks and investments. They are often used interchangeably, but they refer to two different things. Stock assignment is the process of transferring ownership rights of a stock from one party to another, while Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. In this section, we will discuss in detail what Stock Assignment and Stock Power are, how they work, and why they are important.

1. What is Stock Assignment?

Stock Assignment refers to the transfer of ownership rights of a stock from one party to another. This process is typically used when an investor wants to sell their shares to someone else. The seller must sign an Assignment of Stock Certificate form, which is a legal document that transfers ownership rights to the buyer . The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

2. What is Stock Power?

Stock Power is a legal document that authorizes the transfer of ownership rights from one party to another. It is typically used when an investor wants to transfer their shares to a family member or a trust. The seller must sign a stock Power form , which is a legal document that authorizes the transfer of ownership rights to the buyer. The buyer must then present the form to the company's transfer agent, who will update the company's records to reflect the change in ownership.

3. What are the differences between Stock Assignment and Stock Power?

The main difference between Stock Assignment and Stock Power is the purpose for which they are used. Stock Assignment is used when an investor wants to sell their shares to someone else, while Stock Power is used when an investor wants to transfer their shares to a family member or a trust. Another difference is the legal document that is used. Stock Assignment uses an Assignment of Stock Certificate form, while Stock Power uses a Stock Power form.

4. What are the benefits of Stock Assignment and Stock Power?

The main benefit of Stock Assignment and Stock Power is that they provide a legal framework for transferring ownership rights of a stock from one party to another. This ensures that the transfer is done legally and that the new owner has full ownership rights to the stock. It also ensures that the company's records are updated to reflect the change in ownership, which is important for tax purposes.

5. What are the risks of Stock Assignment and Stock Power?

The main risk of stock Assignment and stock Power is that they can be used for fraudulent purposes. For example, someone could forge an Assignment of Stock Certificate or a Stock Power form to transfer ownership rights of a stock to themselves. To mitigate this risk, it is important to use a reputable transfer agent and to verify the authenticity of the legal documents.

6. Which option is better: Stock Assignment or Stock Power?

The choice between Stock Assignment and Stock Power depends on the purpose for which they are being used. If an investor wants to sell their shares to someone else, then Stock Assignment is the better option. If an investor wants to transfer their shares to a family member or a trust, then Stock Power is the better option. It is important to use the correct legal document and to ensure that the transfer is done legally to avoid any potential risks .

Introduction to Stock Assignment and Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to owning stock, it's important to understand the concept of ownership rights. Ownership rights refer to the various privileges that come with owning stock, such as voting rights and the ability to receive dividends. Understanding these rights is crucial for investors who want to make informed decisions about their investments. In this section, we'll take a closer look at ownership rights in stock and what they mean for investors.

1. Voting Rights

One of the most important ownership rights in stock is the right to vote. When you own stock in a company, you are entitled to vote on certain matters that affect the company. These matters can include electing members to the board of directors, approving mergers or acquisitions, and making changes to the company's bylaws. The number of votes you have is typically based on the number of shares you own. For example, if a company has 1,000 shares outstanding and you own 100 shares , you would have 10% of the voting power.

2. Dividend Rights

Another ownership right in stock is the right to receive dividends. Dividends are payments made by a company to its shareholders, usually on a quarterly basis. The amount of the dividend is typically based on the company's profits and can vary from year to year. If you own stock in a company that pays dividends, you are entitled to a portion of those payments based on the number of shares you own.

3. Liquidation Rights

If a company goes bankrupt or is liquidated, shareholders have the right to a portion of the company's assets. This is known as liquidation rights. However, in most cases, shareholders are the last in line to receive payment after creditors and other stakeholders have been paid.

4. Preemptive Rights

Preemptive rights refer to the right of existing shareholders to purchase additional shares in a company before they are offered to the public. This allows shareholders to maintain their ownership percentage in the company and prevent dilution of their shares.

5. Transferability of Ownership Rights

Ownership rights in stock are transferable, meaning you can sell your shares to another investor. When you sell your shares, you transfer your ownership rights to the buyer. However, it's important to note that some ownership rights, such as voting rights, may be restricted for a period of time after the sale.

understanding ownership rights in stock is crucial for investors who want to make informed decisions about their investments. Voting rights, dividend rights, liquidation rights, preemptive rights, and transferability of ownership rights are all important concepts to understand. When considering investing in a company, it's important to evaluate these ownership rights and consider the potential risks and rewards .

Understanding Ownership Rights in Stock - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock power plays a crucial role in transferring ownership of stocks from one person to another. Without it, the process would be more complicated and time-consuming. In this section, we will explore the different aspects of stock power and its importance in transferring ownership.

1. Definition of Stock Power: A stock power is a legal document that authorizes the transfer of ownership of a stock from the owner (the "grantor") to another person or entity (the "grantee"). It is also known as a stock assignment or a stock power form. The stock power form contains the details of the stock being transferred, the name of the grantee, and the signature of the grantor.

2. importance of Stock power : Stock power is important because it provides proof of ownership transfer and protects both the grantor and the grantee. With a stock power, the grantor can transfer ownership of the stock without physically delivering the stock certificate. This avoids the risk of loss or theft of the stock certificate. On the other hand, the grantee can prove ownership of the stock through the stock power, which is crucial for selling the stock or receiving dividends.

3. Types of stock Power forms : There are two types of stock power forms: "blank" and "special." A blank stock power form is unsigned and does not specify the name of the grantee. It is commonly used for transferring ownership of stocks to a brokerage firm or for depositing the stocks into a trust account. A special stock power form is signed and specifies the name of the grantee. It is used for transferring ownership of stocks to a specific person or entity.

4. How to Fill Out a Stock Power Form: Filling out a stock power form is a simple process. The grantor needs to sign the form and specify the name of the grantee. The grantee also needs to sign the form to acknowledge receipt of the stock. The completed form should be sent to the transfer agent or the brokerage firm that handles the stock.

5. Alternatives to Stock Power: While stock power is the most common way to transfer ownership of stocks, there are alternatives. One option is to use a trust. The grantor can transfer the stock to a trust and name the grantee as the beneficiary. The grantee will receive the stock upon the grantor's death. Another option is to use a will. The grantor can specify in the will that the stock should be transferred to the grantee upon the grantor's death.

Stock power plays an important role in transferring ownership of stocks. It provides proof of ownership transfer and protects both the grantor and the grantee. There are different types of stock power forms, and filling them out is a simple process. While there are alternatives to stock power, it is the most common way to transfer ownership of stocks.

The Role of Stock Power in Transferring Ownership - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to transferring ownership rights with stock power , there are various ways to obtain this crucial document. Whether you are a shareholder looking to transfer your ownership or a company seeking to issue new shares, understanding the different methods available can help streamline the process and ensure a smooth transition of ownership. In this section, we will explore some common ways to obtain stock power, providing insights from different perspectives and comparing several options to determine the best approach.

1. Directly from the Transfer Agent:

One of the most straightforward ways to obtain stock power is by contacting the transfer agent directly. The transfer agent is responsible for maintaining the shareholder records and managing the transfer of ownership. They can provide you with the necessary stock power forms, which typically need to be completed, signed, and notarized before submitting them back to the transfer agent. This method ensures that the required documentation is obtained directly from the authorized party, reducing the risk of errors or fraudulent activity.

2. Online Stock Power Forms:

In today's digital era, many companies offer the convenience of online stock power forms. Shareholders can access these forms through the company's website or a designated platform. Online forms often include step-by-step instructions and may even provide a notary service. This option can save time and effort, as there is no need for physical paperwork or mailing documents. However, it is essential to ensure the online platform is secure and trustworthy, protecting sensitive information from potential cyber threats.

3. Brokerage Firms:

If you hold your shares through a brokerage account, you can obtain stock power through your broker. Brokerage firms typically have their own procedures for transferring ownership and may require specific forms or documentation. Contact your broker to inquire about the process and any associated fees. While this option may be convenient for shareholders who already have a brokerage account, it may not be the best choice for those who prefer a direct relationship with the transfer agent or have shares held outside of a brokerage account.

4. In-person at a Financial Institution:

Some shareholders may prefer to obtain stock power in person, either at their bank or another financial institution . This option allows for face-to-face interaction and immediate access to the necessary forms. However, not all financial institutions offer this service, so it is important to check beforehand. Additionally, consider any associated fees and potential time constraints when opting for this method.

Comparing the different ways to obtain stock power, the best option ultimately depends on your specific circumstances and preferences. If you have a direct relationship with the transfer agent, obtaining stock power directly from them ensures accuracy and eliminates potential intermediaries. On the other hand, online stock power forms can offer convenience and ease of use, particularly for tech-savvy individuals . Brokerage firms provide a viable option for those already utilizing their services, while in-person visits to financial institutions may be preferred by individuals seeking a personal touch.

Understanding the various ways to obtain stock power is crucial for shareholders and companies alike. By exploring the options available and considering the specific requirements and preferences, individuals can choose the most suitable method to transfer ownership rights efficiently and securely.

Ways to Obtain Stock Power - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, there are several important steps to follow. Filling out the stock power form is one of the most crucial steps in this process, as it legally transfers ownership of the stock from one party to another. In this section, we will explore the process of filling out a stock power form, including what information is required, how to properly fill it out, and what to do after it is completed.

1. Understanding the Stock Power Form

A stock power form is a legal document that is used to transfer ownership of stock from one party to another. It is typically used in situations where the actual stock certificate is not available, such as when the stock is held in a brokerage account. The stock power form contains important information about the stock, such as the name of the company, the number of shares being transferred, and the name of the current owner.

2. Gathering the Required Information

Before filling out the stock power form, it is important to gather all of the necessary information. This may include the name of the company that issued the stock, the number of shares being transferred, and the name and contact information of the current owner. It is also important to have the recipient's information on hand, including their name and contact information.

3. Filling Out the Form

When filling out the stock power form, it is important to be accurate and thorough. The form will typically ask for the name and address of the current owner, as well as the name and address of the recipient. It may also ask for the number of shares being transferred, the date of the transfer, and other relevant information. It is important to double-check all of the information before submitting the form.

4. Submitting the Form

Once the stock power form has been filled out, it should be signed and dated by the current owner. Depending on the situation, the form may need to be notarized or witnessed by a third party. The completed form should be submitted to the appropriate parties, such as the brokerage firm or transfer agent.

5. Considerations When Filling Out a Stock Power Form

When filling out a stock power form, it is important to consider several factors. For example, if the stock is being transferred as a gift, it may be subject to gift taxes. It is also important to consider any restrictions or limitations on the transfer of the stock, such as those imposed by the company or by applicable laws and regulations.

6. Best Practices for Filling Out a Stock Power Form

To ensure that the stock power form is filled out correctly and completely, it is important to follow best practices. This may include reviewing the form carefully before submitting it, double-checking all of the information, and seeking professional advice if necessary. It is also important to keep copies of all relevant documents, such as the stock power form and any supporting documentation.

Filling out a stock power form is an important step in transferring ownership rights with a stock power. By following the steps outlined above and considering the relevant factors, it is possible to ensure that the transfer is completed correctly and legally.

Filling out a Stock Power Form - Stock Assignment: Transferring Ownership Rights with Stock Power

Executing a stock assignment is a process that involves transferring ownership rights from one party to another. It is a crucial step in the stock transfer process, and it requires both the assignor and the assignee to follow specific procedures to ensure a smooth transfer of ownership . In this section, we will explore the steps involved in executing a stock assignment and some insights from different points of view.

1. Review the Stock Power Form

Before executing a stock assignment, it is essential to review the stock power form carefully. This document is a legal instrument that transfers ownership rights from the assignor to the assignee. It contains important information, such as the name of the assignor, the name of the assignee, the number of shares being transferred, and the date of the transfer. Both the assignor and the assignee must sign the stock power form in the presence of a notary public.

2. Choose the Right Type of Stock Assignment

There are two types of stock assignments: a full assignment and a limited assignment. A full assignment transfers all ownership rights from the assignor to the assignee, while a limited assignment transfers only specific ownership rights, such as the right to vote or receive dividends. The type of stock assignment you choose depends on your specific needs and circumstances.

3. Consider the Tax Implications

Executing a stock assignment may have tax implications for both the assignor and the assignee. The assignor may be subject to capital gains tax if the stock has appreciated in value since it was acquired. The assignee may be subject to income tax if they receive dividends or sell the stock at a profit. It is important to consult with a tax professional to understand the tax implications of executing a stock assignment.

4. Choose the Right Method of Transfer

There are several methods of transferring ownership rights, including physical delivery, book-entry transfer, and electronic transfer. Physical delivery involves the physical delivery of stock certificates from the assignor to the assignee. Book-entry transfer involves the transfer of ownership rights through an intermediary, such as a stock transfer agent . Electronic transfer involves the transfer of ownership rights through an electronic network, such as the depository Trust company (DTC). The method of transfer you choose depends on your specific needs and circumstances.

5. seek Professional assistance

Executing a stock assignment can be a complex process, and it is advisable to seek professional assistance. A stock transfer agent can help you navigate the transfer process and ensure that all necessary procedures are followed. A tax professional can help you understand the tax implications of executing a stock assignment. Seeking professional assistance can help ensure a smooth transfer of ownership rights.

Executing a stock assignment is an essential step in transferring ownership rights from one party to another. It requires careful consideration of the stock power form, the type of stock assignment, the tax implications, the method of transfer, and professional assistance. By following these steps, you can ensure a smooth transfer of ownership rights.

Executing a Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When transferring ownership rights with a stock power, legal considerations must be taken into account to ensure a smooth and legally valid transaction. These considerations can vary depending on the type of stock being transferred and the parties involved. Here are some of the key legal considerations to keep in mind:

1. Type of Stock: The type of stock being transferred will impact the legal requirements for the transfer . For example, transferring common stock may require different legal documentation than transferring preferred stock. It's important to understand the specific requirements for the type of stock being transferred.

2. Parties Involved: The parties involved in the transfer will also impact the legal considerations . For example, transferring stock between family members may require different documentation than transferring stock between unrelated parties. It's important to understand the legal requirements based on the parties involved.

3. Tax Implications: The transfer of stock ownership can have tax implications for both the transferor and transferee. It's important to understand the tax consequences of the transfer and to consult with a tax professional if necessary.

4. Securities Laws: The transfer of stock ownership is subject to certain securities laws, including the Securities act of 1933 and the Securities Exchange act of 1934. These laws regulate the sale and transfer of securities and may require certain disclosures or filings.

5. State Laws: State laws may also impact the transfer of stock ownership. For example, some states require specific documentation or filings for stock transfers. It's important to understand the state laws that apply to the transfer.

When considering the legal considerations for stock assignment, it's important to consult with a legal professional to ensure compliance with all applicable laws and regulations. A legal professional can also help determine the best option for transferring ownership rights with a stock power.

Options for transferring ownership rights with a stock power include:

1. Direct Transfer: A direct transfer involves transferring the stock from one party to another without the involvement of a broker or intermediary. This option may be simpler and less expensive, but may require more legal documentation and may not be available for all types of stock.

2. Broker-Assisted Transfer: A broker-assisted transfer involves using a broker to facilitate the transfer of stock ownership. This option may be more expensive, but may be easier and more efficient, particularly for larger transfers or transfers involving multiple parties.

3. Gift Transfer: A gift transfer involves transferring ownership of the stock as a gift. This option may have tax implications for the transferor and transferee and may require additional legal documentation.

Ultimately, the best option for transferring ownership rights with a stock power will depend on the specific circumstances of the transfer. Consulting with a legal professional can help determine the most appropriate option and ensure compliance with all applicable legal requirements.

Legal Considerations in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

When it comes to stock assignment, there are several mistakes that people make which can lead to legal and financial complications. It is important to understand the process of transferring ownership rights with stock power and avoid these common mistakes.

1. Failing to Complete the Stock Assignment Form Correctly

One of the most common mistakes made in stock assignment is failing to complete the stock assignment form correctly. This can lead to delays in the transfer of ownership rights and can result in legal complications. It is important to ensure that all the required fields are filled out correctly and that the form is signed and dated by the appropriate parties.

2. Not Having a Properly Endorsed Stock Certificate

Another mistake that people make is not having a properly endorsed stock certificate. This is important because the stock certificate is the physical representation of the ownership rights of the stock. It is important to ensure that the certificate is properly endorsed by the seller and that the buyer has the certificate in their possession.

3. Not understanding the Tax implications of Stock Assignment

Another mistake that people make is not understanding the tax implications of stock assignment. Depending on the circumstances, there may be tax implications for both the buyer and the seller. It is important to consult with a tax professional to understand the tax implications before completing the stock assignment.

4. Not Using a Broker or Transfer Agent

Some people try to complete the stock assignment themselves without using a broker or transfer agent. This can lead to complications and delays in the transfer of ownership rights. It is recommended to use a broker or transfer agent to ensure that the process is completed correctly and efficiently.

5. Not Verifying the Identity of the Buyer or Seller

Finally, it is important to verify the identity of the buyer or seller before completing the stock assignment. This can help to prevent fraud and ensure that the transfer of ownership rights is legitimate. It is recommended to use a reputable broker or transfer agent who can help with this process.

Stock assignment can be a complicated process, but by avoiding these common mistakes, it can be completed successfully. It is important to ensure that the stock assignment form is completed correctly, that the stock certificate is properly endorsed, that the tax implications are understood, and that a reputable broker or transfer agent is used. By following these guidelines, the transfer of ownership rights can be completed efficiently and without complications.

Common Mistakes to Avoid in Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

Stock Power and Stock Assignment are important concepts in the world of finance and investment. These concepts help investors transfer ownership rights of their stocks to another party. In this blog post, we have discussed the details of these concepts and their implications. We have also analyzed the different perspectives and provided insights on how to use these concepts effectively.

1. Importance of Stock Power and Stock Assignment

Stock Power and Stock Assignment are essential tools for investors who want to transfer ownership rights of their stocks to another party. These concepts enable investors to transfer their stocks without having to go through the hassle of selling them. This is particularly useful in cases where the investor wants to gift the stocks to someone or transfer them to another account.

2. Understanding Stock Power

Stock Power is a legal document that enables the transfer of ownership rights of a stock from one party to another. It is an endorsement that is required by the brokerage firm to transfer the ownership of the stock. The stock power must be signed by the owner of the stock and must be submitted along with the certificate of the stock to the brokerage firm.

3. Understanding Stock Assignment

Stock Assignment is a process where the ownership rights of a stock are transferred from one party to another. The process involves filling out a transfer form and submitting it to the brokerage firm. The transfer form must be signed by the owner of the stock and must be submitted along with the certificate of the stock.

4. pros and Cons of stock Power and Stock Assignment

Stock Power and Stock Assignment have their own advantages and disadvantages. Stock Power is a simpler process that requires the submission of a single document, whereas Stock Assignment involves filling out a transfer form. However, Stock Power can only be used if the certificate of the stock is in the possession of the owner, whereas Stock Assignment can be used even if the certificate is lost or misplaced.

5. Best Option

The best option depends on the situation. If the certificate of the stock is in the possession of the owner, Stock Power is the best option. However, if the certificate is lost or misplaced, Stock Assignment is the better option. In any case, it is important to consult with the brokerage firm to determine the best option.

Stock Power and Stock Assignment are important concepts that enable investors to transfer ownership rights of their stocks. These concepts have their own advantages and disadvantages, and the best option depends on the situation. It is important to consult with the brokerage firm to determine the best option.

Conclusion and Final Thoughts on Stock Power and Stock Assignment - Stock Assignment: Transferring Ownership Rights with Stock Power

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How to Change Stock Ownership

Transferring shares can be easy or hard depending on how you own your stock.

Stock investors typically focus on how to buy or sell shares of the stocks they own. Yet from time to time, you might want to make gifts of stock, either to family members, charities, or other people or institutions. The process of changing stock ownership is more complex than simply giving someone a piece of paper, and depending on how you own your shares, you'll need to follow a different process to complete your gift or transfer. 

Three ways to own stock There are three different ways you can hold shares of stock. Most people who have brokerage accounts hold shares in street name, meaning that the broker they use is the official registered owner of the shares. Your stock is allocated to you internally within the broker's operational records, but as far as the company whose shares you own is concerned, ownership remains with your broker. That means that you'll have to work with your broker to change stock ownership. For help choosing a broker for this, visit our broker center to compare what's available.

Alternatively, there are two situations in which you will be recognized as the official owner of your stock. If you hold paper stock certificates, your name will be reflected in the company's own records. Alternatively, some companies allow you to register shares directly, especially if the company offers a direct reinvestment investing plan. Either way, you'll work directly with the company's transfer agent to change stock ownership.

The process of changing stock ownership If you own stock in street name, then you can work with your broker to change the ownership of some or all of your shares. Contact your broker to get the appropriate forms to complete. The process will be simpler if the new owner also has or will have an account with the same broker, because no change in the actual registration of the shares will be necessary. The broker will simply make the transfer on its own internal books. If you transfer shares outside your broker, you'll need a broker-to-broker transfer form, and your current broker will need instructions on how to make the transfer to the receiving broker.

If you have a stock certificate or have your shares registered directly, then the transfer process will involve the company's transfer agent. You can find out who your company's transfer agent is by contacting its investor relations department. Then, the transfer agent will have you send in any paper stock certificates you have, along with a letter of instruction to instruct it on how to change the ownership of the stock. You'll typically need to get a signature guarantee from a financial institution to satisfy the transfer agent, and you might also need other legal documents granting you authority to change ownership.

Giving shares of stock isn't as simple as giving cash, but it can be a better way to give both for you and for your intended recipient. With help, you can navigate the process of changing stock ownership the way you want.

This article is part of The Motley Fool's Knowledge Center, which was created based on the collected wisdom of a fantastic community of investors. We'd love to hear your questions, thoughts, and opinions on the Knowledge Center in general or this page in particular. Your input will help us help the world invest, better! Email us at   [email protected] . Thanks -- and Fool on!

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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How to Transfer Shares of Stock to Another Person

Transferring stock to a loved one is done through a stock transfer agent.

grandparents with grandchild image by Pavel Losevsky from Fotolia.com

More Articles

•   1. How to Transfer Stock Ownership
•   2. How Much to Transfer Stocks to My Kids?
•   3. What Happens to the Cost Basis When Moving Stocks to a Trust Account?

Transferring stock to another person is easy. Most companies provide a link with stock transfer instructions on their websites or direct you to a stock transfer agent who handles stock transfers for the company. There are no tax implications for the recipient when the shares are transferred, but you may face a gift tax if the value of the stock transfer exceeds a certain amount.

You can use a stock registry agent and stock transfer form in order to officially transfer shares of stock to another individual.

Understanding Stock Transfers

When you purchase a stock, you receive what's called a stock certificate, which is a legal document proving your ownership of the shares. If you decide to transfer your shares to someone else, you'll have to perform a stock transfer using a stock transfer form. You can obtain the form by visiting the website of the stock registry agent or contacting the agent by phone.

First Steps For Completing the Transfer

Print the "Stock Transfer Form," fill it out in its entirety, and endorse the stock certificates. You'll also have to obtain a medallion guarantee from an approved financial institution. Once you're satisfied that you filled everything out correctly, mail the stock transfer form and the stock certificates to the agent.

Understanding the Gift Tax

Every year the Internal Revenue Service publishes an amount, referred to as the annual exclusion limit, that you're allowed to give to another person without having to fill out a gift-tax return. In the years, 2013 through 2017, the amount was steady at $14,000. However, for 2018, the annual gift tax exclusion limit has been raised to $15,000. If the value of your stock transfer is above the annual limit, you'll have to file a gift-tax return using IRS Form 709. Ordinarily, the gift tax can be as high as 40 percent, but most taxpayers don't pay a gift tax because of the unified credit, which applies to both the gift and estate taxes.

In 2018, the unified credit for individuals is $11.18 million – a figure which more than doubled from the previous year with recent 2017 tax reforms – that applies to every taxpayer over his lifetime. This means you can apply the excess of the value of the stock transfer against the unified credit and not have to pay a gift tax although you'll still have to file a gift-tax return.

Tax Impact to Recipient

It is worth noting, the Tax Cuts and Jobs Act of 2017 made sweeping tax reforms. One of the many changes for years 2018 through 2025, is the way long-term and short term capital gains are taxed. Prior to the Act, long-term capital gains taxes were tied to ordinary federal income tax rates. Now, long-term capital gains have their own tax brackets ranging from a 0 percent bracket for $0 to $38,601 in qualifying dividends or long-term capital gains, to a 20 percent bracket for gains of $425,801 and higher. Although you avoid the gift tax, the recipient will have to pay a capital gains tax if she makes a profit off the shares. In general, the IRS uses your cost basis to establish cost basis for the recipient if she sells the shares for a gain.

For instance, if she sells the shares within one year of receiving them, she pays a short-term capital gains tax, which could be as high as 37 percent. Because short-term capital gains are taxed at ordinary income tax rates, this can range from 10 percent to 37 percent under new reforms. If she sells the shares past one year, she pays the long-term capital gains tax of 20 percent or lower, depending on her income bracket. However, if she has a modified adjusted gross income higher than $200,000 as an individual, she could find herself subject to the additional net investment income tax, or NIIT, of 3.8 percent.

If your cost basis fell at the time of the transfer and the recipient sells the shares for less than that, the IRS uses the cost basis at the time of the transfer to calculate her capital loss.

• Securities and Exchange Commission: Transfer Agents
• IRS: What's New - Estate and Gift Tax
• IRS: Forms and Publications - Estate and Gift Tax
• MarketWatch: Your simple guide to the new capital gains tax rates
• IRS: Questions and Answers on the Net Investment Income Tax

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Shares Transfer Agreement: Definition & Sample

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What is a Shares Transfer Agreement?

A shares transfer agreement, also known as a stock purchase agreement, is an legal document used to transfer the ownership of shares of stock. The party transferring shares could be a person or a company. This agreement type is usually entered into by a buyer and a seller where the seller wishes to sell a specific number of shares to the buyer for an agreed upon price. The shares transfer agreement specifies the terms and conditions of the sale.

• Details about the party transferring the shares
• Consideration (what is being given to the seller in exchange for the shares - usually money); and
• Information about the shares such as the share type and the share value

Common Sections in Shares Transfer Agreements

Below is a list of common sections included in Shares Transfer Agreements. These sections are linked to the below sample agreement for you to explore.

Shares Transfer Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.G 2 dex10g.htm SHARE TRANSFER AGREEMENT , Viewed October 4, 2021, View Source on SEC .

Who Helps With Shares Transfer Agreements?

Lawyers with backgrounds working on shares transfer agreements work with clients to help. Do you need help with a shares transfer agreement?

Post a project  in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate shares transfer agreements. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Jason has been providing legal insight and business expertise since 2001. He is admitted to both the Virginia Bar and the Texas State Bar, and also proud of his membership to the Fellowship of Ministers and Churches. Having served many people, companies and organizations with legal and business needs, his peers and clients know him to be a high-performing and skilled attorney who genuinely cares about his clients. In addition to being a trusted legal advisor, he is a keen business advisor for executive leadership and senior leadership teams on corporate legal and regulatory matters. His personal mission is to take a genuine interest in his clients, and serve as a primary resource to them.

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Creative, results driven business & technology executive with 24 years of experience (15+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

I offer flat/fixed fees rather than hourly work to help lower your legal costs and align our interests. I specialize in contract law and focus on making sure your contract is clear, protects your interests and meets your needs. You can expect fast, straightforward communication from me, making sure you understand every step. With my experience, you'll get a detailed review of your contract at a fair, fixed price, without any surprises. I have over 30 years of business and legal experience that I bring to your project. I graduated from The University of Texas School of Law with High Honors in 1993 and practiced at Texas' largest law firm. I have founded companies and so understand how to be helpful as both a lawyer and business owner.

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Cassie has spent more than a decade handling all aspects of litigation, focusing on divorce, family law, Personal Injury Protection (PIP) claims, contracts, fraudulent insurance claims, and bodily injury claims. She has worked at small boutique law firms, in house for major insurance carriers, and most recently as a partner at a large nationwide practice. She has served as lead counsel on thousands of cases statewide. Cassie now contributes this knowledge and experience for the benefit of her clients. She is zealous about obtaining the best financial outcome for her clients and supporting them while they navigate the difficult terrain of family law, contracts, insurance claims, and personal injuries.

Matt practices law in the areas of commercial finance, contract law, business & corporate law, and residential and commercial real estate (with a particular emphasis on retail shopping centers and office buildings). He has extensive experience in negotiating and structuring complex commercial loan, asset acquisition, asset disposition, leasing and real estate transactions. Matt additionally works on various general matters for clients such as forming LLCs and corporations, preparing various LLC and corporation documents and drafting and reviewing various types of contracts and agreements for clients and providing advice regarding same. Matt provides clients with extensive and timely communication on their matters and ensures that his clients are well represented and highly satisfied with their legal representation and the work product provided. Matt offers all potential clients a free initial consultation to discuss their legal matters prior to engaging his firm to represent them. Prior to opening his law firm Matt worked for many years in the New York City office of a large international law firm where he counseled large multi-national businesses, financial institutions, investment groups and individuals on highly sophisticated business, financial and real estate transactions. Matt provides his clients with diligent legal representation on their matters with a very personal approach.

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I am a business organization, IP and data privacy attorney with over 19 years of experience, as well as a Certified Information Privacy Professional. I have successfully worked in both the public and private sectors, contribute to academia in all of my areas of expertise, and hold leadership positions with key organizations in the legal industry. Some sample agreements/documents with which I have drafting and negotiating expertise include: Business Formation Agreements Privacy Policies Information Security Policies and Documentation Master Services Agreements Joint Venture Agreements Non-Disclosure & Confidentiality Agreements Software Licensing Agreements Employment Contracts Distribution Agreements Equipment Lease Agreements All forms of Entertainment Legal Agreements M&A Due Diligence Checklists EDiscovery Protocols Legal Hold Documentation Outsourcing Agreements Real Estate Purchase & Sale Agreements Subcontracting Agreements Software Development Agreements for Mobile Apps IP Licensing and Royality Agreements Loan Agreements & Documentation Insurance Policy Reviews Employee Handbooks & Policies E-Commerce Terms & Conditions Sponsorship Agreements All forms of Digital Creator Agreements Subscription Agreements & Policies Agency Agreements Supply Chain & Logistics Agreements And more...

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How to Transfer Shares of Stock Within a Corporation?

Knowing how to transfer shares of stock within a corporation is important for business owners. The ownership percentage is determined by the shares. 3 min read updated on July 08, 2020

Knowing how to transfer shares of stock within a corporation is important for business owners. A person's percentage of ownership in a company is determined by the shares they hold. The respective shares can be sold or given by their owners however they see fit, as long as it complies with the shareholder agreements they signed prior to the transfer.

Stock Transfers

Shares can be transferred through different types of business entities, such as corporations, partnerships or limited liability companies. Each entity has a different share structure, share transfer guidelines, and maximum number of shareholders.

Most companies have share transfer guidelines and written agreements between owners, clearly specifying how the share value is calculated and who may or may not own shares in that respective company. Although all corporations should have these agreements, not all of them do.

If such an agreement does not exist, a person must realistically value its stock before transferring it, in order to comply with IRS rules and state corporation laws.

Once the presence or lack of an agreement is determined, a purchase agreement needs to be created to complete the share transfer. This document clearly outlines all the details regarding the transfer. Once this legal document has been signed, the share certificates need to specify their new owner's name.

Transferring an S Corporation's Shares

An S corporation is a business that complies with a specific set of regulations to benefit from a special tax regime offered by the IRS. One of the most important regulations includes a restriction on who can own stock in the company. Not complying can mean losing tax privileges.

Any well run S corporation should be careful to restrict stock transfers in order to avoid accidentally transferring stock to an ineligible party and therefore losing the special tax status. In order to transfer stock properly, there are several steps that need to be taken:

• Find out if the S corporation has a shareholders' agreement in place
• Determine the correct price for the stock. If an agreement is in place, it may specify the price you can charge for your stock. If there is no agreement, you will need to determine the company's total value and determine the price of your stock based on what percentage of the entire company your shares represent.
• The next step is determining whether the party you wish to sell your shares to is allowed to own stock in that company. Shares in S companies may only be owned by citizens or residents, or by certain entities, not including partnerships or other corporations.
• A sales agreement must be drafted, clearly specifying the parties involved, the price of the stock, and how much of it will be purchased.
• Another important clause in the sale agreement is the buying entity agreeing to fully respect the S corporation's internal laws and shareholder agreements already in place.
• Finally, both parties need to sign the document and keep a copy for tax purposes.
• If all steps are properly taken, the company's board of directors will acknowledge the new ownership of the respective stocks and document the date, price, and other details of the transaction.

The Stock Transfer Ledger

An important document for any corporation is the stock transfer ledger which effectively keeps track of all details regarding the institution's shares and their owners. Such a document often includes the following clauses:

• The name of the initial owner of the shares
• The initial owner's address
• The exact date when they became shareholder
• The certificate number for their shares
• How much stock they own in the company
• How they initially obtained the shares
• Details regarding the sum of money paid for the shares
• The date when the transfer occurred
• Who the new owner will be
• How many shares there are in total
• How many shares exist outside the respective transaction
• Amount of taxes due following the transaction.

The ledger is useful for any action regarding the shares, such as sale, transfer, or loss. Due to its obvious importance for a corporation, the ledger is kept by the corporation's secretary, along with other crucial documents like the corporate seal.

If you need help with transferring shares of stock within a company, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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Content Approved by UpCounsel

• What is Stock Corporation?
• Corporate Stock Transfer Agreement
• Authorized Stock
• Stock Corporation
• Stock Ledger
• How to Issue Shares in a Company
• Authorized Shares
• Issuance of Stock
• S Corp Shares
• Issuing Shares in an S Corporation: What You Need to Know

HOW ARE SHARES OF STOCKS TRANSFERRED?

After reading How are shares of stocks transferred? , read also Administrative Sanctions and Criminal Penalties under the Pre-Need Code of the Philippines

For shares of stocks with a stock certificate, there must be delivery of the stock certificate, indorsement and recording in the stock and transfer book of the corporation.

For shares of stocks without a stock certificate, transfer must be done by means of a deed of assignment and recording in the stock and transfer book of the corporation.

The Corporation is not a party to the transfer of shares of stocks through any form of conveyance.

S hares of stocks in a corporation are treated as personal property under our existing laws. Like any other personal property, an owner of shares of stocks can sell, assign, transfer or convey his property to another person as an attribute of ownership. However, the law may regulate shares of stocks since by its nature, it is considered as intangible personal properties. As such, any manner of conveyance or transfer must also be regulated.

The law says:

Section 62 of the Revised Corporation Code of the Philippines states that:

SEC. 62 . Certificate of Stock and Transfer of Shares . – The capital stock of corporations shall be divided into shares for which certificates signed by the president or vice president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the bylaws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner, his attorney in-fact, or any other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates, and the number of shares transferred. The Commission may require corporations whose securities are traded in trading markets and which can reasonably demonstrate their capability to do so to issue their securities or shares of stocks in uncertificated or scripless form in accordance with the rules of the Commission. No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. (Emphasis supplied.)

What are the requirements of a valid transfer of shares of stocks?

For shares of stocks that are represented by a stock certificate, the following must be strictly complied with:

• delivery of the stock certificate;
• indorsement by the owner or his agent;
• recording in the books of the corporation. (Sec. 62, Revised Corporation Code)

However, if the shares of stocks are not represented by a stock certificate, such as when the certificate has not yet been issued or when such certificate is not in the possession of the stockholder, the transfer must be:

• by means of a deed of assignment; and
• such is duly recorded in the books of the corporation.

Jurisprudence says:

For the delivery of the stock certificate, the Supreme Court ruled that the term delivery means delivery to the assignee or the transferee and not delivery to the corporation. (Teng v. Securities and Exchange Commission, G.R. No. 184332, 17 February 2016)

In the case of Rural Bank of Lipa v. Court of Appeals (G.R. No. 124535, 28 September 2001) , the Supreme Court has held that for the transfer of shares of stocks to be valid and binding to third parties, such transfer must be recorded in the books of the corporation.

It must be noted that the registration in the stock and transfer book is not necessary if the conveyance is by way of chattel mortgage. However, there must be due registration with the Register of Deeds . (Chua Guan v. Samahang Magsasaka, G.R. No. L-42091, 2 November 1935)

Registration is likewise necessary if the heirs of the deceased shareholder acquire the latter’s shares of stocks. (Reyes v. RTC and Zenith Insurance Corporation, G.R. No. 165744, 11 August 2008)

The corporation whose shares of stock are the subject of a transfer through sale, donation, or any mode of conveyance, is not a party to the transaction. (Forest Hill Golf & Country Club v. Vertex Sales and Trading, G.R. No. 202205, 6 March 2013)

May a stockholder bring a suit to compel the corporate secretary to register valid transfer of stocks?

Yes, a stockholder may compel the corporate secretary to register a valid transfer of stocks. It is the duty and obligation of the corporate secretary to register the transfer of stocks.

Is the attachment or mortgage of shares of stocks required to be registered in the corporation’s stock and transfer books to be valid and binding on the corporation and third parties?

No, an attachment or mortgage of shares of stocks need not be registered in the corporation’s stock and transfer books inasmuch as a chattel mortgage over shares of stocks does not involve a transfer of shares.

Only absolute transfers of shares of stocks are required to be registered in the corporation’s stocks and transfer book in order to have the force and effect against third persons. (Chemphil Export and Import Corporation v. Court of Appeals, G.R. No. 112438-39, 12 December 1995)

Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at [email protected], or dial us at (02)7745-4391/0917-5772207.

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Assignment: Definition in Finance, How It Works, and Examples

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

What Is an Assignment?

Assignment most often refers to one of two definitions in the financial world:

• The transfer of an individual's rights or property to another person or business. This concept exists in a variety of business transactions and is often spelled out contractually.
• In trading, assignment occurs when an option contract is exercised. The owner of the contract exercises the contract and assigns the option writer to an obligation to complete the requirements of the contract.

Key Takeaways

• Assignment is a transfer of rights or property from one party to another.
• Options assignments occur when option buyers exercise their rights to a position in a security.
• Other examples of assignments can be found in wages, mortgages, and leases.

Uses For Assignments

Assignment refers to the transfer of some or all property rights and obligations associated with an asset, property, contract, or other asset of value. to another entity through a written agreement.

Assignment rights happen every day in many different situations. A payee, like a utility or a merchant, assigns the right to collect payment from a written check to a bank. A merchant can assign the funds from a line of credit to a manufacturing third party that makes a product that the merchant will eventually sell. A trademark owner can transfer, sell, or give another person interest in the trademark or logo. A homeowner who sells their house assigns the deed to the new buyer.

To be effective, an assignment must involve parties with legal capacity, consideration, consent, and legality of the object.

A wage assignment is a forced payment of an obligation by automatic withholding from an employee’s pay. Courts issue wage assignments for people late with child or spousal support, taxes, loans, or other obligations. Money is automatically subtracted from a worker's paycheck without consent if they have a history of nonpayment. For example, a person delinquent on $100 monthly loan payments has a wage assignment deducting the money from their paycheck and sent to the lender. Wage assignments are helpful in paying back long-term debts.

Another instance can be found in a mortgage assignment. This is where a mortgage deed gives a lender interest in a mortgaged property in return for payments received. Lenders often sell mortgages to third parties, such as other lenders. A mortgage assignment document clarifies the assignment of contract and instructs the borrower in making future mortgage payments, and potentially modifies the mortgage terms.

A final example involves a lease assignment. This benefits a relocating tenant wanting to end a lease early or a landlord looking for rent payments to pay creditors. Once the new tenant signs the lease, taking over responsibility for rent payments and other obligations, the previous tenant is released from those responsibilities. In a separate lease assignment, a landlord agrees to pay a creditor through an assignment of rent due under rental property leases. The agreement is used to pay a mortgage lender if the landlord defaults on the loan or files for bankruptcy . Any rental income would then be paid directly to the lender.

Options Assignment

Options can be assigned when a buyer decides to exercise their right to buy (or sell) stock at a particular strike price . The corresponding seller of the option is not determined when a buyer opens an option trade, but only at the time that an option holder decides to exercise their right to buy stock. So an option seller with open positions is matched with the exercising buyer via automated lottery. The randomly selected seller is then assigned to fulfill the buyer's rights. This is known as an option assignment.

Once assigned, the writer (seller) of the option will have the obligation to sell (if a call option ) or buy (if a put option ) the designated number of shares of stock at the agreed-upon price (the strike price). For instance, if the writer sold calls they would be obligated to sell the stock, and the process is often referred to as having the stock called away . For puts, the buyer of the option sells stock (puts stock shares) to the writer in the form of a short-sold position.

Suppose a trader owns 100 call options on company ABC's stock with a strike price of $10 per share. The stock is now trading at $30 and ABC is due to pay a dividend shortly. As a result, the trader exercises the options early and receives 10,000 shares of ABC paid at $10. At the same time, the other side of the long call (the short call) is assigned the contract and must deliver the shares to the long.

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How to transfer shares, and using Gift Hold-Over Relief to defer taxes

What’s in this article, important facts about tax on share transfer, what tax do i pay when i sell my shares, how do i transfer shares to someone as a gift, when you give shares as a gift, you are liable to pay tax, how to transfer shares tax-free with gift hold-over relief, how to pay the tax you owe on a share transfer, hiring a new co-founder or employee and want to give them shares, ready to transfer your shares, anthony rose.

As a shareholder in a startup or private company, you might find yourself in a situation where you need to transfer your shares to someone. At SeedLegals we see people using Share Transfer forms for all sorts of reasons including:

• shareholders giving shares to their husband or wife (‘gifting’ their shares)
• founders selling their shares to a buyer
• angel investors transferring their shares, either by way of sale to follow-on investors or as a gift to family members
• founders transferring shares to new co-founders (but note the ERS issue, below)

What many people don’t know is that there are significant tax considerations to take into account whenever one person transfers shares to another. These depend on whether you’re:

• selling your shares in exchange for cash, or
• giving your shares to someone for free (for example, as a gift)

In this article, we’ll outline the tax on selling or transferring shares for both parties so both you and the recipient don’t get any nasty surprises when your tax bill arrives.

In case the rest of this article is TL;DR, here are three important facts we want all our customers to know:

• You can get tax relief on some types of share transfer Gift Hold-Over Relief is designed to defer the Capital Gains Tax (CGT) that you’d owe if you transfer shares for free or below market value. Business Property Relief can apply to reduce any Inheritance Tax (IHT) that might apply – either at the date of gift or if the person giving the gift dies within seven years of gift.
• HMRC never see a transfer to an employee as a gift If the share transfer is from someone connected to the company, to someone who is, or will become, an employee or director of the company, then the transfer might be deemed an Employment Related Security (ERS). This means that the value of the shares they receive could be considered to be income, so it would be subject to Income Tax, rather than CGT. In this situation, Gift Hold-Over Relief can’t apply. We’ve explained more about this below. (‘Connected to’ here means for example a founder who is considered to have control over the company, either by overall share ownership or voting or other rights.)
• Transferring shares is complicated Get expert help. Before you do a share transfer , make sure you seek your own independent legal, accounting and tax advice, particularly if the person receiving the transfer is or will become an employee or director of the company.

In general, you’ll need to pay Capital Gains Tax when you sell (or give away for free) an asset such as shares. The amount of tax depends on factors such as your income, the amount of capital gains that you made from the transfer of shares during a tax year, etc.

HMRC has a useful capital gains tax calculator that you can refer to when you’re planning to do a share transfer.

In general, if the transfer isn’t eligible for Business Asset Disposal Relief , the gain from the sale of shares which is over the annual Capital Gains Tax allowance (at April 2022, this allowance is £12,300 ) is taxed at the normal Capital Gains Tax rates. Currently CGT is 20% for higher and additional rate taxpayers, and 10% for taxpayers whose income and gains don’t exceed the basic rate bracket (source: gov.uk ).

Until April 2020, Business Asset Disposal Relief was called Entrepreneurs’ Relief. If you’re eligible, you’ll pay tax at 10% on all gains on qualifying assets. Check the gov.uk website to find out if you could be eligible for this relief.

In any case, consult your tax advisor so that you can be absolutely sure about your tax liabilities when you transfer shares by selling them.

When does Inheritance tax (IHT) apply on a gift of shares?

IHT can apply if the gift of shares (or sale at less than the market value) is to an individual and the person making the gift dies within seven years of the gift.

For other types of ‘gift’ such as transferring shares into a trust or to a company, IHT can apply immediately .

IHT is a complex topic and not addressed in detail in this article. If you’re considering gifting or transferring shares for free or for less than market value, seek qualified tax advice before you make the transfer.

Do you only pay tax when you sell shares?

As well as these tax implications when you transfer shares, when you buy shares, you might need to pay Stamp Duty. Read more about Stamp Duty when buying shares at the gov.uk website .

Quite often, a shareholder (who might also be a founder) wants to give their shares as a gift to another shareholder (who might also be a co-founder), or to a family member. By ‘gift’ here, we mean giving shares for free or selling shares for less than their market value.

The good news is that there’s no Capital Gains Tax on assets (including shares) if you give them as a gift to your spouse or civil partner – unless you’re separated and didn’t live with them at all in that tax year.

If you gift shares to a family member other than your spouse or civil partner, then you and the recipient are liable for tax in the same way as if the recipient wasn’t related to you.

The general rule is that when a person makes a gift of a ‘chargeable asset’ – such as shares in a company – this is considered to be a ‘disposal’, which could create a ‘chargeable gain’ – a gain for which you’d incur Capital Gains Tax). In this way, if you gift a chargeable asset, it’s the same as if you transfer them in exchange for money.

However, for CGT in the case of a gift of shares, what’s important is the market value of the shares at the time you ‘dispose’ of them. The rationale behind this is that the tax is imposed on the increase of the value of the shares during the time you’ve been holding them. So if the value of the shares has increased from the time you acquired them to the time you give them away for free, then that increase is taxable.

To show how this works, here’s an example: Let’s say you received 2,000 Ordinary shares at a nominal value of £0.001 per share. After the company does a funding round, the market value of these shares will increase – now they’re worth £10 per share. This means that if you want to give these 2,000 shares away for free, you could be liable for Capital Gains Tax calculated on the difference between the current market value of the shares (£10 x 2,000 = £20,000) and the acquisition value of the shares (£0.001 x 2,000 = £2) – so the taxable ‘gain’ is £19,998.

For IHT, if you’re gifting shares, what’s important is the reduction in value of your estate (broadly your net personal value) as a result of the gift.

This can seem strange: when you give away shares for free (or for a sale price that’s less than market value), how come you might have to make a tax payment to HMRC? Shouldn’t it be the person receiving them that pays the tax..?

If you were holding shares which went up in value, it can feel that you haven’t ‘earned’ anything from them. But it’s that gain in value that means you’d have to pay CGT when you give them as a gift. As far as HMRC sees it, you’ve made money on those shares and you haven’t yet paid tax on that gain. Oh, and the person who receives the shares will be liable to pay tax but later on – when they later transfer or sell the shares.

But wait! There’s a way to transfer shares as a gift without paying CGT. Keep reading…

Gift Hold-Over Relief makes it possible to give away your shares as a gift to another UK resident, tax-free. This relief doesn’t apply if you give shares to a company.

Gift Hold-Over Relief doesn’t exempt any of the chargeable gain, but instead postpones the tax liability. The relief is designed to allow people to give away shares as a gift without a tax charge falling on the person making the gift.

For Gift Hold-Over Relief to apply, the chargeable gain is calculated in the usual way explained above. Quick recap: the chargeable gain is the price per share at your last funding round minus the price you paid when you acquired the shares. This gain is deducted from the market value of the shares to establish an artificially low ‘acquisition cost’ for the individual receiving the shares.

When the person receiving the shares sells them on in the future, their chargeable gain is worked out by deducting the artificially low acquisition cost from the sale price or market value.

If this person decides to give away the shares in future as a gift, they could use Gift Hold-Over Relief again! Magic.

To be eligible for Gift Hold-Over Relief when you’re giving away shares:

• The shares must not be for a company listed on any recognised stock exchange Or if it is, you have at least 5% of voting rights in the company.
• The company’s main activities must be in trading For example, providing goods or services rather than non-trading activities like investing. Even if relief is available, it will be restricted pro rata if the company (or group) holds assets that aren’t used for trading purposes (such as investment assets).
• The recipient must be a person resident in the UK for tax purposes If the person receiving the shares becomes non-UK resident within six years of the end of the tax year of the gift, then they’ll have to pay tax on the amount equal to the gain on which you claimed the relief.

With Gift Hold-Over Relief, you don’t pay Capital Gains Tax on the shares you give away, but you might be liable to pay tax if you sell an asset for less than it’s worth to help the buyer, or if you make a gain on what you paid for the shares originally.

To claim Gift Hold-Over Relief, you must apply to HMRC jointly with the person receiving the shares, at the time you give them the gift.

You’ll need to fill in form HS295 and include it with your Self Assessment tax return.

For a full explanation of Gift Hold-Over Relief, read the gov.uk webpage .

You’ll need to declare share transfers on your tax return. If you claim Gift Hold-Over Relief, make sure you include a copy of the relief claim form in your Self Assessment return.

From the information in your return, HMRC will calculate what you owe and you’ll be charged as usual – either through PAYE via a change in your tax code, or in Self Assessment payment.

If you’re not sure what to do or how to pay, ask your accountant or tax specialist.

If you transfer shares to a new co-founder or employee, the shares might be classed as an Employment Related Security . In this case, instead of gifting shares to your employee, both you and the employee might be better off if you give your new colleague EMI share options instead.

How to give share options with an option scheme

It’s easy to create your EMI Option Scheme on SeedLegals. At SeedLegals, we’ve helped thousands of companies set up and manage their option scheme. We’re the UK #1 – we set up more EMI Option Schemes than anyone else.

In our experience, the right time to set up a share option scheme is before you’ve started a fundraising round, when you’re gaining traction and/or when you’re growing your team. A.J. Alao Account Manager, SeedLegals

To issue share options, you’d usually create a share option pool (this is also easy to do on SeedLegals). Then you can issue tax-efficient EMI options to your new colleague.

Sorted. Or is it? When you create an options pool, you dilute the shareholding of all the existing shareholders – which they probably won’t be thrilled about.

How to give share options without creating an option pool

Is there a way to give your new co-founder or employee options without diluting the other shareholders? Yes – you could give them share options over some of your shares.

To do this, you need a contract between you, the employee and the company – it’s known as a tripartite agreement . This agreement gives the employee share options in the company – but over your shares, rather than from an option pool.

The agreement prevents you from selling all your shares – because if you did, the option arrangement wouldn’t be enforceable. The agreement also set out the conditions for you having sufficient vested shares, including if you’re a Bad Leaver and so on.

Be aware that you’ll have a taxable capital gain on exercise if the exercise price is more than the original cost you paid for the shares.

We don’t yet offer a tripartite agreement on SeedLegals because it needs to be unique to each company and it isn’t commonly asked for. Instead, we can refer you to a law firm who can create the agreement for you. If you think this way of giving share options might be right for you, hit the chat button to ask us and we’ll be happy to help.

Remember, in most cases, the easiest and most tax-efficient way to give equity to a new co-founder or other team member is to issue new shares or to grant them share options from an existing option pool. These two methods are much faster and involve fewer hurdles than transferring shares out of your own existing holdings. Anthony Rose Co-Founder and CEO, SeedLegals

After you’ve considered the tax implications of your transfer, it’s super simple to do a share transfer on SeedLegals. Register or log in to create and sign all the paperwork you need including the Board Resolution, Deed of Adherence, J30 and more.

If you have questions about transferring your shares, our team is here to help. Hit the chat button to speak to our experts or book a call below.

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Transfers of shares held in trust are not subject to tax

MANILA  -In corporate law, it is common practice for lawyers to handle transfers of shares of stock from nominees to their principals, or to new nominees. Prior to the Revised Corporation Code, which came into effect in February 2019, corporations were required to have at least five stockholders and directors, each holding a minimum of one share of stock in the company.

When establishing a corporation, business owners would often seek out nominees to hold a qualifying share in order to meet the requirement of five shareholders. Typically, these nominees are the trusted officers of the principal stockholder who, since they do not own the company, eventually move on to other employment opportunities, thereby severing their connection with the company.

In such cases, the nominees would execute a deed of assignment of the shares to return them to the principal or to the new nominee who will be taking their place.

Even with the introduction of the Revised Corporation Code which allows for less than five stockholders in a corporation, many companies still prefer to maintain several board seats in their board for various reasons, one of which is for good governance.

Accordingly, transfers of shares of stock from nominees to new nominees are quite common. Oftentimes, the transfer of shares is done by the execution of a deed of assignment by the nominee to the principal or new nominee. However, issues concerning actual consideration for the transfer and the taxes that may be due may arise. Moreover, the relevant laws and regulation provide that before registering a transfer of share to the new shareholder, the corporation’s corporate secretary must satisfy itself that proper taxes have been paid to the Bureau of Internal Revenue (BIR). This is done by the submission of the tax returns and the tax clearance or certificate of authority to register issued by the BIR.

In terms of taxation, currently, the sale of shares of stock is subject to a flat rate of 15 percent on capital gains taxes (CGT). There is also the Documentary Stamp Tax (DST) which is P1.50 for every P200 on the sale or transfers of shares of stocks. It also used to be the practice of the BIR examiners to assess Donor’s Tax on the transaction when the declared consideration for the transfer of shares was below the book or market value.

The taxes that may be imposed could be substantial, as some nominees may hold thousands of shares in their names. This practice is not prohibited nor uncommon, as the only requirement is that the shareholder and director hold at least one share of stock.

Accordingly, are these transfers of shares of stock by nominees back to their principal or to the new nominees subject to the CGT, DST, or Donor’s Taxes ?

The answer is: No.

In a tax ruling dated Nov. 8, 2021, Sun Life of Canada (Philippines), Inc. (Sun Life), requested the BIR for an exemption from the payment of taxes on the transfer of their Manila Polo Club shares.

Sun Life’s shares were registered in the name of and assigned to its officers who were allowed to make use of the facilities of the Polo Club in building their business network. It sought a transfer of the shares to a new set of officers as the previous officers were no longer connected with the company.

The company representatives all executed Declarations of Trust where they declared that Sun Life is the true and beneficial owner of the shares, that the shares were registered in their names because the articles of incorporation of the Manila Polo Club provides that no institutional members shall be admitted as a shareholder, that they have no title, right, claim or interest whatsoever over the shares, and Sun Life may designate another company officer as the new holder and user of the shares.

The BIR confirmed that:

1. The transfer of shares from the nominee-officers to the new nominee-officers were not subject to Capital Gains Taxes 2. The transfers are also not subject to the Documentary Stamp Taxes; 3. The transaction is not a Donation 4. The tax that is due is the Documentary Stamp Taxes on the Deeds of Declaration of Trust

(BIR Ruling No. OT – 0653-2020, November 8, 2021)

Sun Life’s shares of stock in the Manila Polo Club in the name of its nominees were covered by Declarations of Trust executed by the nominees all of whom acknowledged that the transfer did not give them any kind of right, claim or interest whatsoever in the shares and that they are holding only legal ownership of the same where the beneficial ownership belongs to the Company.

It was established that Sun Life was the one who purchased the shares and had registered the same in the officers’ names, who were its nominees, since the Articles of Incorporation and By-laws of the Manila Polo Club provided that only natural persons may become registered members.

Sec. 24 (C) of the National Internal Revenue Code provides that a final tax rate of fifteen percent is imposed upon the net capital gains realized during the taxable year from the sale, barter, exchange, or other disposition of shares of stock in a domestic corporation, except shares sold or disposed of through the stock exchange.

Accordingly, CGT is only imposed upon the “net capital gains” realized during the taxable year which means the tax is on gain or profit from the sale of capital assets.

Since the transfer of the Manila Polo Club shares only involves legal title and not beneficial ownership, which remains with Sun Life, then there is no gain or profit and consequently, no capital gains taxes are due.

The BIR found that no capital gains taxes are due considering that:

(1) the shares are actually owned by Sun Life, and the transferors and transferees are mere nominees and/or trustees of Sun Life who only hold legal title (2) There is no actual transfer of ownership and beneficial title (3) no monetary consideration is involved, no gain or profit resulted in the transfer which is merely by virtue of an assignment as evidenced by the Declaration of Trust.

In the matter of DST, the BIR declared that a mere transfer of a share from one trustee to another, without a change in the beneficial ownership of the share is, therefore not the taxable transaction being contemplated under the Tax Code provision on DST. There being no new conveyance to speak of in this case, there is no new exercise of a privilege upon which DST may be imposed.

DST on trust document

DST is however due on the Declaration of Trust.

Not a donation

There is a lack of any intention on the part of the transferors to donate to the transferee the Manila Polo Club shares. Moreover, the transaction was found to be purely for a legitimate business purpose. Accordingly, there is no donation and no donor’s tax due.

The BIR confirmed that in a trust relationship covered by a declaration of trust, transfers by the nominee of shares of stock held by it back to the principal or to a new a nominee is not subject to CGT and DST. It is also not a donation subject to donor’s taxes.

Lastly, just a final word on trust for our readers.

A trust is a legal relationship where one person has equitable ownership of property and another person owns the legal title to the property. Trusts are distinguished by the separation of legal title and equitable ownership of the property, with the fiduciary (trustee) holding legal title and the trustor holding equitable title. (Soledad Caezo vs. Rojas, G.R. No. 148788, November 23, 2007)

A trust may be expressed or implied. In this case, the Declaration of Trust referred to in BIR Ruling No. OT – 0653-2020 is an express trust. It is a document whereby a person acknowledges that they hold the property title for the use of another.

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(The author, Atty. John Philip C. Siao, is a practicing lawyer and founding Partner of Tiongco Siao Bello & Associates Law Offices, teaches law at the MLQU School of Law, and an Arbitrator of the Construction Industry Arbitration Commission of the Philippines. He may be contacted at [email protected] . The views expressed in this article belong to the author alone.)

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How to Transfer Shares of Stock in a Corporation

Philippine law treats shares of stock in a corporation as personal property . Similar to other personalty, the owner of the property can sell, assign, transfer or convey his property to another as he wishes. This is an attribute and principle of ownership which cannot be taken away. However, being in the nature of intangible personal property, the law regulates such kinds of properties, including the manner in which they can be conveyed or transferred.

Section 63 of the corporation code affirms that the owner of a share of stock in a corporation has the right to transfer his shares . It is the provision that outlines the fundamental requirements which must be complied with if a stockholder in a corporation wishes to transfer his shares to another. Section 63 reads:

“ Sec. 63. Certificate of stock and transfer of shares. – The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates endorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation showing the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred.

No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. “

Being intangible personalty, the corporation code requires that , before a share of capital stock is validly sold, transferred, assigned or in any manner conveyed, it must be covered by a stock certificate . This requirement is borne out of practical considerations. It is a fundamental principle of contract law (be it of sale, assignment or any other conveyance) in the Philippines and probably in any jurisdiction, that the parties to any contract must be aware of the subject matter – what is being sold, transferred or otherwise conveyed. On the other hand, shares of stock in a corporation do not have physical form, unlike ordinary chattel such as goods or vehicles, where a person has a clear notion of what is being sold or conveyed.

The stock certificate is evidence of the personalty owned by the stockholder. It defines the nature and extent of his ownership over the share/s of stock. It also outlines the regulations and limitations of ownership, which must be considered and made known to the parties prior to any conveyance. Obviously, without the stock certificate, these matters would be unknown to a prospective buyer or transferee of shares of stock. Simply stated, the subject matter of the conveyance will not be clear. Therefore, only shares of stock covered by a stock certificate can be subject of a legally demandable and binding sale or disposition.

There may be instances where shares of stock are sold or transferred prior to the issuance of stock certificates. At best, these transactions are only binding between the parties, and will not bind the corporation. As a matter of fact, the corporation can legally refuse to recognize such transfers, especially if the shares which were sold have not yet been fully paid. The last paragraph of Section 63 states that no shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. This means that the corporation can altogether refuse to recognize the validity of a sale or transfer of a share of capital stock that has not been fully paid, or which the corporation has a lien. In this case, the purchaser’s only remedy lies with the stockholder.

In the case of De los Santos, et al. vs. MacGrath, et al., G.R. No. L-4818, 28 February 1955 , the Supreme Court interpreted the provisions of Section 63 of the corporation code . The Supreme Court held that any voluntary transfer of shares of stock in a corporation that is represented by a certificate of stock must strictly comply with the following conditions:

a. There must be delivery of the certificate;

b. The share must be indorsed by the owner or his agent; and

c. To be valid to the corporation and third parties, the transfer must be recorded in the books of the corporation.

One of the requirements to effect a valid transfer of shares of stock is that the certificate of stock must be endorsed by the owner or his agent . Mere delivery or handing over of the stock certificate is insufficient , and does not produce the effects of a transfer or conveyance to another. Endorsement of the stock certificate is one of the operative acts which validates the transfer . Without the act of endorsement by the stockholder, the sale or disposition will not be binding upon the corporation. Of course, there are remedies under the law to compel the owner to endorse the stock certificate which he or she has already conveyed to another. But before endorsement of the stock certificate, the corporation can refuse recognize the transferee stockholder.

Moreover, as between the corporation on one hand, and its shareholders and third persons on the other, the corporation looks only to its books for the purpose of determining who its shareholders are. Thus, as between the “real” owner of a stock certificate and the registered owner or the person actually registered in the Stock and Transfer Book of a corporation , it is the person registered in the Stock and Transfer Book who must sign or endorse the certificate of stock to allow its sale or transfer.

Further, the Supreme Court in the case of Padgett vs. Babcock & Templeton, Inc., G.R. No. 38684, 21 December 1933, held that shares of corporate stock are regarded as personal property and may be disposed by the owner as he sees fit, unless the corporation is dissolved, or unless the right to do so is properly restricted or the owner’s privilege is hampered by his actions. A corporation cannot impose undue restrictions upon the owner’s right to sell, transfer or otherwise convey his shares of stock.

According to the Supreme Court, a restriction imposed upon a stock certificate, which unduly prohibits the owner from conveying his property, is null and void on the ground that it constitutes and unreasonable limitation of the right of ownership and is in restraint of trade. It was also held that any restriction on a stockholder’s right to dispose of his shares must be construed strictly; and any attempt to restrain a transfer of shares is regarded as being in restraint of trade, in the absence of a valid lien upon its shares, and except to the extent that valid restrictive regulations and agreements exist and are applicable. Subject only to such restrictions, a stockholder cannot be controlled in or restrained from exercising his right to transfer by the corporation or its officers or by other stockholders, even though the sale is to a competitor of the company, or to an insolvent person, or even though a controlling interest is sold to one purchaser.

However, recognizing the right of the corporation to regulate the transfer of shares of stock in a corporation, the Supreme Court stated that there can be restrictive regulations or agreements which can be entered into between the corporation and the stockholder, to regulate ownership of the shares of stock. These regulations or agreements pertain to those indicated in the certificates of stock, and also those that may be found in the By-Laws of the corporation. The Supreme Court emphasized that these regulations are construed strictly against the corporation, and in favor of the ownership rights of the stockholder. An absolute prohibition from selling shares of stock was held as null and void on the ground that it constitutes and unreasonable limitation of the right of ownership and is in restraint of trade.

An example of a invalid restriction upon the right of a stockholder to dispose of a share of stock in a corporation is found in the case of in the case of Fleischer vs. Botica Nolasco Co., 47 Phil 583 . In this case, the Supreme Court discussed the validity of a clause in the by-laws of a corporation which prohibited the owner of a stock certificate from selling his shares to any person other than the corporation. The by-laws mandated that the owner of a share of stock could not sell it to another person except to the corporation.

In deciding the legality and validity of said restriction, the Supreme Court ruled that the only restraint imposed by the Corporation Law upon transfer of shares is that no transfer of shares of stock shall be valid, except as between the parties, until the transfer is entered and noted upon the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of the certificate, and the number of shares transferred. According to the Supreme Court, this restriction is necessary in order that the officers of the corporation may know who its stockholders are, which is essential in conducting elections of officers, in calling meetings of stockholders, and for other purposes.

The Supreme Court declared that any restriction in the by-laws which exceeds what is provided in the corporation code is ultra vires, violative of the property rights of shareholders, and in restraint of trade. This is because the by-laws of a corporation cannot contradict the general policy of the laws of the land, and must always be strictly subordinate to Philippine laws.

In Rural Bank of Salinas vs. Court of Appeals, G.R. No. 96674, 26 June 1992, the Supreme Court held that a corporation, either by its board, its by-laws, or the act of its officers, cannot create restrictions in stock transfers. The corporation code contemplates no restriction as to whom the stocks may be transferred. It does not suggest that any discrimination may be created by the corporation in favor of, or against a certain purchaser. The owner of shares, as owner of personal property, is at liberty, under said section to dispose them in favor of whomever he pleases, without limitation in this respect, than the general provisions of law. The only limitation imposed by Section 63 of the corporation code is when the corporation holds any unpaid claim against the shares intended to be transferred, which was not present in the case.

This is how to transfer shares of stock in the Philippines.

Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, or e-mail us at [email protected] .

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LLC Membership Interest Assignment

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What is an LLC membership interest assignment?

An LLC membership interest assignment is a document used when one member of a limited liability company ("LLC") wishes to transfer the entirety of their interest in an LLC to another party . This document is often used when a member of an LLC is leaving or otherwise wants to give up the entirety of their interest in the company. Using this document, the current owner of shares in the LLC transfers all of them over to another person or entity.

A limited liability company , also known as an LLC, is a corporate structure that protects its owners from being personally liable for debts and liabilities of the company . LLCs do not pay taxes on their profits directly. Instead, profits and losses are passed through to the individual members, who report them on their personal tax returns.

What is the difference between an LLC membership interest assignment and an LLC membership purchase agreement?

Though both documents involve the transfer of interest in an LLC from one party to another, these two documents serve different purposes. The LLC membership interest assignment transfers the entirety of one person's interest in the LLC to another person. It is also not a sale document.

An LLC membership purchase agreement is the sale of some portion of a party's interest in an LLC to another party.For example, if someone owned 50% interest in an LLC, they could sell 25% of their interest in the LLC to another party and keep the remaining 25% interest for themselves.

Is it mandatory to use an LLC membership interest assignment?

Yes, using an LLC membership interest assignment is mandatory in most states. In the few states where it is not mandatory, it is still highly advisable to use this document to be sure to protect the interests of the parties involved and to make sure all the members of the LLC are informed about the ownership transfer.

What is "membership interest"?

Membership interest is a party's ownership stake in an LLC. It represents the parties' right to share in the profits and losses of the LLC and to receive distributions from it.

What are the prerequisites of an LLC membership interest assignment?

Prior to creating an LLC membership interest assignment, several things should happen. Firstly, the parties should review the LLC's operating agreement . This document may contain restrictions or requirements for the transfer of interest in the LLC. For example, the operating agreement may require that existing members of the LLC have the right to buy the interest in the LLC before it is sold to any outside third party.

The parties to the agreement should also get consent to the sale from the current members of the LLC. This is not always necessary, but it is common and usually considered good practice.

Before agreeing to the terms of the LLC membership interest assignment, the new owner should also do research into the LLC to be sure that it is in good standing and not involved in ongoing litigation or bankruptcy proceedings.

Who is involved in an LLC membership interest assignment?

The LLC membership interest assignment includes the party giving up their interest in an LLC and the party receiving the interest in the LLC. Both of these parties can either be individual people or entities, like a business or charitable organization.

What has to be done once the LLC membership assignment agreement is done?

Once the LLC membership interest assignment is done, it should be signed and dated both the assigning party and the receiving party . All members of the LLC should be notified of the transfer. This notification usually happens by providing a copy of the Assignment and any related documents to the LLC's registered agent or manager. Information about the process is typically specified in the LLC Operating Agreement . In some states, transfer of interest in an LLC requires that formation documents be updated and refiled with the appropriate state office to reflect changes in membership. This may also involve filing an amendment to the Articles of Organization. The LLC should be sure to update its bank accounts, contracts, licenses, and permits as necessary to reflect the membership change. Finally, the LLC should maintain accurate records of the transfer of interest, saving for future reference copies of the Assignment Agreement, amended Operating Agreement, consent of members, and any other relevant documents.

Is it necessary to register the LLC membership interest assignment?

In some states, transfer of interest in an LLC requires that formation documents be updated and refiled with the appropriate state office to reflect changes in membership. This may also involve filing an amendment to the Articles of Organization .

What must an LLC membership interest assignment contain?

A valid LLC membership interest assignment must contain at least the following mandatory clauses:

• Identification of involved parties : The LLC membership interest assignment will include details about the identity of both the party giving up their interest, as well as the party who will get the interest in the LLC.
• Description of membership interest : The LLC membership interest assignment includes details about the membership interest, including the percentage of the LLC and whether it includes voting rights.

In addition to the above mandatory clauses, the LLC membership interest assignment may also include the following optional clause:

• Consent requirement : If needed, this document includes an addendum at the end specifying that all the members of the LLC consent to the transfer of interest.

Which laws are applicable to an LLC membership interest assignment?

LLC Membership Interest Assignments are subject to the laws of individual states . There is no one federal law covering these documents because each individual state governs the businesses formed within that state.

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Sec opinion 21-03: deed of trust and assignment over share of stock.

In SEC-OGC Opinion No. 21-03 dated February 18, 2021, the Securities and Exchange Commission ( “SEC” ) resolved the following issues:

• Whether a company with nominee shareholder can register in its Stock and Transfer Book ( “STB” ) and General Information Sheet ( “GIS” ) the changes in nominee shareholders pursuant to an existing Deed of Trust and Assignment without the need of an actual sale; and
• Whether there is a need to report to the SEC, through the company’s GIS, the said new nominee director.

Sysmex Philippines, Inc. ( “Sysmex” ) has five (5) nominee shareholders who also constitute the Board of Directors. One nominee shareholder/director is no longer connected with Sysmex; thus, the latter intends to appoint a new shareholder/director. However, Sysmex is in quandary on whether to execute a Deed of Trust and Assignment or Deed of Absolute Sale to effect such change. 

Since the contemplated transfer of share/s to the new nominee shareholder is for purposes of qualifying the said nominee shareholder to be a member of the Board, and to complete the number of directors composing the same, the SEC cited its previous opinions where it held that:

“ For purposes of complying with the statutory minimum number of stockholders/directors, the owner may transfer one (1) qualifying share to each nominee stockholders for purposes of qualifying them to become members of the Board, without giving them the beneficial ownership of the shares. Said transfer would be more of a “trust” and not a transfer of “ownership,” hence, the beneficial interest in such shares will remain with the assignor while the assignee will hold only the legal title to the stock.  In such case, the transferee should be described in the Deed of Assignment, corporate books and certificate of stock merely as a qualifying shareholder or nominee of the transferor. The fact that the stock standing on the corporate books is in the name of the person only as a qualifying shareholder or that the holder of the stock certificate is described merely as a nominee serves as a notice to the corporation and third parties that the holder thereof does not hold the share in his own right but holds it only as a nominee for the benefit of the real owner.”  [emphasis supplied]

Thus, the SEC opined that Sysmex can validly report in its GIS changes in nominee shareholders pursuant to a validly executed Deed of Trust and Assignment.

With respect to the second issue, the SEC held that Section 25 of the Revised Corporation Code (“ RCC ”), which categorically mandates the submission of information relating to the election of directors, trustees and officers, is intended to timely apprise the SEC of any relevant changes in the submitted information on file with the latter as they arise. Section 25 of the RCC thus provides:

“Section 25. Within thirty (30) days after the election of the directors, trustees and officers of the corporation, the secretary , or any other officer of the corporation, shall submit to the Commission, the names, nationalities, shareholdings, and residence addresses of the directors, trustees, and officers elected. x x x” [Emphasis supplied]

The election or appointment of a new director is a circumstance of Sysmex’s governance structure that needs to be reported to the SEC through its GIS as it involves a material change in the Board’s composition.

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Why It Is Important to Assign Shares to Family Trusts

Most of our clients probably have family trusts. Yet 99% of the 20,000 entities in our system are not owned by trusts, but by the individuals who formed the entities. We want to take this break from our regularly scheduled programming to remind our clients that if you have a trust, you can only realize its full benefit by insuring that all of your assets, including shares in corporations and membership interests in LLCs, are transferred to the trust.

The benefits of establishing a trust for estate-planning purposes are well documented and include avoiding probate to save time and money and to keep estate matters private. [1] But these benefits are lost if the trust is not properly “funded,” that is, if the assets of the person establishing the trust (known as the “settlor”) are not transferred into the trust before his or her death. As one estate-planning practitioner has explained,

[t]he most important step is funding the trust. It is an estate planning attorney’s imperative to communicate to clients the importance of funding the inter vivos trust [2] during the life of the settlors. A well-funded inter vivos trust does not typically require court oversight; however, a trust that has not been fully funded may require court petitions in order to transfer property into the trust after the death of the settlor, defeating the purposes of avoiding probate . [3]

In other words, the settlor’s property (including corporate shares and LLC membership interests) has to be in the trust in order for the advantages of the trust, including maintaining privacy, to be realized.

Although there are ways of getting property into a trust after the settlor has died, none of these options desirable. In particular, most estate plans involving the creation of a trust also call for the execution of a “pour-over will.” A pour-over will provides that all of the decedent’s “forgotten assets,” that is, those assets that were not successfully transferred to the trust during the settlor’s lifetime for whatever reason, should be paid to the trust. [4] The problem is that a pour-over will, like any other will, is ineffective until it has been probated, [5] which defeats the probate-avoidance purpose of establishing a trust.

Most states also have a small estate exemption that can be used to avoid probate for some amount of a settlor’s forgotten assets that did not make it into the trust before the settlor died. It is unwise, however, to rely on the small estate exemption as a post hoc method of funding a trust for various reasons, including the hassle and expense involved and, more importantly, the limited nature of the exemption. In New York, for example, a “small estate” is defined as the estate of a person who dies leaving personal property having a gross value of $30,000 or less, exclusive of various enumerated items, including “marketable securities” and other “money” not exceeding $25,000 in value. [6] Corporate shares and LLC membership interests are personal property, [7] but are probably not marketable securities in the context of the type of closely held corporation or LLC with just a few members that we are talking about here. So any corporation or LLC having a modest value of more than $30,000 will bust the small estate exemption. The limit is higher in California—$150,000—but that includes real and personal property in the state and provides for fewer excluded items than in New York, [8] so again the small estate exemption should not be relied on in California as a probate-avoidance technique.

Why are some assets “forgotten” when it comes time to fund a trust? One commentator in the area suggests that

the most common reason for the settlor’s failure to transfer property to his or her revocable trust is a simple lack of information regarding the necessity that they do so. A large portion of individuals who execute revocable trusts do not understand how the trusts work or how they “avoid probate.” Correspondingly, they are unaware of the requirement that they transfer their property to the trust. Moreover, estate planning attorneys generally do not assist their clients with transferring assets to their trust and may not even mention the need to do so to the client. Although the process of transferring most assets to a revocable trust is not complicated, it may be somewhat daunting for a lay-person. [9]

The process of transferring shares to a trust is incredibly easy. We prepare two documents (an Assignment Separate From Certificate and a new share certificate) and then update the stock ledger.

But you have to know to ask. And given that almost all of the shares in our system are individually owned, even though a majority of our clients probably have family trusts to, among other things, achieve privacy in their estate planning, it appears that many of our clients simply do not know to request that shareholding or membership interests in the businesses we form or maintain for them be assigned to their trusts, rather than to themselves individually, [10] which is why we wrote this article.

[1] See, e.g., David J. Feder & Robert H. Sitkoff, Revocable Trusts and Incapacity Planning: More Than Just A Will Substitute , 24 Elder L.J. 1, 16 (2016) (“Unlike a will, which upon probate becomes a public record, a revocable trust need not be filed with a court unless a dispute arises. So there is a privacy advantage to a revocable trust relative to a will, one that persists even in a state that has reformed probate to make it cheaper and faster.” (footnote omitted)); Bradley E.S. Fogel, Trust Me? Estate Planning with Revocable Trusts , 58 St. Louis U. L.J. 805, 817 (2014 ) (“Revocable trusts are quite effective at maintaining the privacy of an individual’s estate plan after his or her death.”); Frances H. Foster, Trust Privacy, 93 Cornell L. Rev. 555, 557 (2008) (“[R]evocable trusts, including those that continue for decades after the settlor’s death, are private.”).

[2] “Inter vivos trust” is merely the technical term for a trust that “is created during the [settlor’s] lifetime and becomes effective upon creation.” Aastha Madaan, The Basics of Inter Vivos Trusts , 33 No. 4 GPSolo 20, 21 (July/Aug 2016).

[3] Madaan, supra note 2, at 23 (emphasis added).

[4] Fogel, supra note 1, at 810.

[5] Id. at 811.

[6] See N.Y. Surr. Ct. Proc. Act Law § 1301(1) ; N.Y. Est. Powers & Trusts Law § 5-3.1(a) .

[7] See, e.g. , Cal. Corp. Code § 17705.01 ; N.Y. Ltd. Liab. Co. Law § 601 .

[8] See Cal. Prob. Code § 13100 .

[9] Fogel, supra note 1, at 813 (footnotes omitted).

[10] There is one caveat in that a trust may not own every type of corporate stock or LLC interest. For example, in California, shares of capital stock in a professional corporation may be issued only to a person who is licensed to render the same professional services offered by the corporation. See Cal. Corp. Code § 13406(a) .

Committed to offering clients expert, personalised legal advice

Assignment of shares in case of a limited company: required documents

In case of limited liability companies, shareholders may assign their shares. This assignment procedure may be performed by a Romanian lawyer .

A consequence of such a share assignment is that the assignor – the person assigning his shares, leaves the company and therefore loses his capacity of shareholder, while the assignee – the person who receives the shares – continues the activity of the company by acquiring the capacity of shareholder.

The share assignment procedure must be carried out at the Trade Registry. Lawyers appointed in this regard shall submit on behalf of the limited liability company (Ltd) all required documents.

Assigning shares is a procedure that may require two steps (if shares are assigned to persons outside the Ltd) or one single step (if shares are assigned to one or more of the Ltd’s existing shareholders). Shares may be assigned to individuals or companies (Romanian or foreign).

Two-step assignment of shares

Documents that need to be prepared as a first step:

• request for the assignment of shares;
• Decision of the General Assembly of Shareholders or, as the case may be, Decision of the sole shareholder (the assignment of shares must be expressly stipulated and all necessary information regarding the assignment);
• Assignment Agreement between the assignor and the assignee;

It is possible to be represented by a Romanian lawyer based on a special power of attorney.

Documents that need to be prepared during the second phase of the procedure:

• Registration request;
• Proof that the Decision of the General Assembly of Shareholders or the Decision of the sole shareholder was published in the Official Gazette;
• Decision of the General Assembly of Shareholders or, as the case may be, the Decision of the sole shareholder, which must include information about the assignment of shares;
• Copies of the individuals’ Identity Cards and, as the case may be, of the incorporation certificates in the case of companies, of those who shall acquire the capacity of shareholder;
• Statement given by the shareholder – company – that it complies with all required conditions for acting in the capacity of shareholder;
• Incorporation certificate, original or a copy bearing an Apostil, from the Trade Registry where the foreign company is registered, certifying its existence;
• Restated Articles of Incorporation – original copy.

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DONE DEAL: Oliver Skipp finalizes transfer to Leicester City

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Farewell, sweet prince. Tottenham Hotspur and Leicester City have finalized the sale of Spurs academy graduate and central midfielder Oliver Skipp. According to David Ornstein in The Athletic, the fee was £20m, plus 5m in performance based add-ons, for a potential total of £25m

We have reached agreement with Leicester City for the permanent transfer of Oliver Skipp. Wishing you all the best for the future, Skippy! — Tottenham Hotspur (@SpursOfficial) August 19, 2024

There isn’t much I can say that Matty didn’t already say when the news first broke of an agreement between Spurs and Leicester. I think we all wanted Skippy to break into the first team and become the next Harry Kane — a Champions League -caliber homegrown and club-trained player, at the club since he was eight, who would end up a one-club man like Ledley King. It’s a nice fairy tale story, but there’s a reason fairy tales are shelved in the fiction section.

The truth is, as nice a guy as Skipp is (and I quite like him) he simply was not at the level Ange Postecoglou needed for his team. Football is a cruel business, and it means that a young player Jose Mourinho called “a future Tottenham club captain” will now join, and likely partner with, another former Spurs homegrown midfielder in Harry Winks at Leicester. And boy oh boy am I ever curious to see how THAT’S going to work out!

£20m+ for Skipp makes him one of the most valuable Spurs academy graduates sales in club history, second in absolute financial terms behind Harry Kane’s transfer to Bayern last summer. He’s one of the best Spurs players to come out of the academy in the Premier League era. That makes Oliver Skipp an exceptional outcome for Tottenham’s academy, even if he ultimately didn’t stick in Spurs’ first team.

Tottenham will have some tough choices to make with regards to their Europa League squad construction, but that was true irrespective of what happens to Oliver Skipp. In the meantime, I can say a heartfelt thank you to Oliver for his many, many years of service to the club. You earned it, buddy.

Now, I hope he has a relegation break clause in his new contract...

Update: According to Alasdair Gold, Spurs have ALSO managed to get a sell-on clause (percentage undisclosed) into the deal. Amazing! Levy’s still got it, y’all.

Spurs will get in excess of £20m for Oliver Skipp overall and I understand they also have a sell-on clause as part of the deal. — Alasdair Gold (@AlasdairGold) August 19, 2024

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NEWS... BUT NOT AS YOU KNOW IT

Bruno Fernandes reveals transfer demand he made before signing new Man Utd deal

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Bruno Fernandes urged Manchester United ’s new hierarchy to deliver big in the summer transfer window before signing a new contract at Old Trafford.

The United captain signed a long-term deal with the club last week , extending his stay in Manchester until 2027 with the option of a further year.

It ended speculation over the Portugal international’s future at the club after comments at the end of last season which raised doubts over whether he would still be at the club this term.

While Erik ten Hag led the club to an FA Cup success, the club slumped to a miserable eighth place finish in the Premier League.

Amid reports suggesting United could even consider realistic offers for their skipper, Fernandes urged the club to demonstrate they could match his own ambitions on the pitch.

United have made four signings this summer , bringing in Joshua Zirkzee, Leny Yoro, Matthijs de Ligt and Noussair Mazraoui to bolster the squad with Fernandes believing the club have shown they mean business this season.

‘The club knew that I want to compete with the best teams. They knew that we needed to improve the team. And I think that we’re doing that,’ Fernandes told United’s official website.

While realistic over United’s hopes of closing the gap on Manchester City and Arsenal in the league, Fernandes now feels there is a squad there capable of competing for more major honours.

‘Obviously, I said to them: “I don’t need you to promise me that we’re going to win the league.” Because no-one can promise that.

‘But at least that we will have a team to compete and be competitive through the season, to try to achieve silverware and to compete in the highest levels.

‘I think the club is doing that. It’s trying to bring people in to get more players with quality in the team; to get more competitive, [so everyone is] fighting for your place.

‘But my first choice was always to stay at the club. It was not even demands, but the things that I wanted to see: the club going forward, [so] I could see a future on that.

‘To be honest, I look now and I see that the club is making an effort for that.’

MORE : Four Chelsea stars left out of latest squad in fresh transfer message

MORE : Arsenal dominate PFA Team of the Year award with five stars named in best XI

MORE : Real Sociedad issue new transfer demand to Arsenal over Mikel Merino deal

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FIRST RIDE REVIEW

The new fox transfer neo dropper, longer drop, lower stack and faster actuation.

Words and Photos by Cole Gregg

Earlier this year Fox Dropped the all-new Transfer post with some much needed updates. Today Fox expands on that Transfer product line with their first wireless electronic dropper, dubbed “Transfer Neo”. The Transfer Neo dropper features the same updates the analog Transfer post received, but with some interesting new tech allowing for wireless operation. This flagship dropper post lands at $859 USD, $1149 CAD and €1100.00 EUR (ex VAT).

ABOUT THE NEW TRANSFER NEO

What Is Neo: Neo is the name for the new wireless protocol developed in-house by Fox’s mechatronics team. Neo’s wireless protocol has a latency of just 26 milliseconds – 100x faster than Bluetooth – making it the undisputed king of speed when it comes to wireless dropper posts.

To achieve this, Fox has essentially taken a Bluetooth-like signal and stripped it down to the bare bones. Think of a production car vs a race car. They only have what is absolutely needed within the signal to complete the task at hand. Neo does not need to transmit audio or video files, just simply produce an on/off signal as fast as possible. This stripped down ultra-low latency signal allows for incredibly fast micro adjustment to saddle height. Easier micro-tuning than even a cable-operated dropper? You bet.

Battery Life: With a 30 – 40 hour battery life, you are likely to get more than a few rides off a single charge, unless you’re going for your next triple Everest attempt. For some, charging may be a weekly habit, and for others it’ll be a monthly one. The battery charges on a specific dock with a USB-C cable included with the post. Charge times are around the 1.5 hour mark. The lever utilizes a commonly found CR2032 battery, which is expected to last around 12 months of consistent use. If your lever does happen to die while out on a ride, there is a button on the battery module on the post that will still allow you to operate it. Should the post die, one to two activations are still possible by removing and reinstalling the battery. This will allow you to set your desired saddle height for the rest of the ride. There is a small LED light on module that displays a simple Green, Orange and Red for quick glances at battery levels.

Post Specs: The Transfer Neo has a stack height of just 47mm, 18mm shorter than the closest wireless competitor. The battery placement on the seat collar allows for greater tire clearance when running the post fully slammed into the seat tube.

Just like the analog version, Neo has a Schrader valve up top to adjust the post’s return speed. The internals of the post have been brought over from the updated 2024 analog Transfer, which includes the two-bolt seat clamp, reduced drop force, and longer service intervals. The post’s motor is located at the bottom of the post, eliminating bulk up top. There is a shield around the motor protecting the internals, which should not be removed.

Neo Lever: The new lever assembly features compatibility for MatchMaker and I-Spec EV to get a clean cockpit, with the different mounting hardware options included in the box. Compared to the standard Transfer lever, there is a 6x shorter throw to actuate the dropper. This shorter throw allows for more flexibility with how you choose to mount the lever on your bars. Lastly the new lever has a IPX7 waterproof rating, so you can ride in the rain and wash your bike worry free.

Options And Adjustability:  The Transfer Neo is available in all three seat post diameters. The 30.9mm and 31.6mm variants come in drops of 100mm, 125mm, 150mm, 175mm and 200mm. The 34.9mm version loses the 100mm drop option. Unlike the analog Transfers, the Transfer Neo does not feature adjustable drop length.

Modes And Fox Bike App: The Transfer Neo features an app that controls modes, tracks data and allows for device pairing. The Fox Bike App is where you can toggle between a few different modes. The Bike Park mode allows you to essentially turn off the dropper to avoid any unwanted actuations. Reverting back to normal operation requires 4 fast clicks on the remote. Transport mode turns off the dropper saving battery life over long drives to new zones. To wake the system you just drop the bike from knee height and the system will be ready to go. These are really neat features that should help to ensure there’s no surprises with dead batteries after a long road trip.

The app also will track how many actuations your post has, allowing you to better plan for getting the post serviced. Fox claims the post should be serviced every 8,000 actuations. Accurate battery life will also be displayed within the app.

THE WOLF’S FIRST IMPRESSION

I attended a Fox press camp for the new Transfer Neo in addition to some other stuff I can’t talk about quite yet… We fitted a 200mm drop post to the Ari Delano Peak test mule. Fox had a solid loop planned for us just North of the Whistler Village climbing Comfortably Numb. This trail only has 575’ of elevation but is punchy and technical the entire way up. After getting my first crash out of the way on the climb (I was distracted by the epic mountain views!) we descended down Out There. This trail made the most of the 575’ of elevation change with many tight zesty climbs and slabs with heavy compressions.

To get this out of the way early on, I have to say the look of the battery module down at the seatpost collar is not my favorite. Once I learned more about the post from Fox’s engineers, the reasoning for its location and size does make a lot of sense. Being able to slam a post for a jump trail is for sure valuable and is something I find myself doing often, especially at my local trails. The lever feel is quite natural, and in my opinion looks great. It resembles a normal dropper lever, with all the new fangled fanciness of wireless operation contained within.

Pairing the Fox Transfer Neo dropper and remote within the Fox Bike App was very straight forward within their guided setup. I did however press and hold the button on the module instead of just one hard press and release my first time. The long press actuates the dropper motor allowing you to drop the post if your lever battery dies. To revert to pairing mode it took just one press and release of the button, and we were good to go.

When it came to getting out on the trail, it was immediately noticeable how fast the response time was. I found myself consistently micro adjusting saddle height on the techier bit of climb that I normally would have just left an analog post fully extended. The new Transfer Neo post is the best of the best when it comes to mid-climb adjustments. I truly think this helped me clean some climbs that I normally would have failed on the first try. Sure you can micro adjust a standard post, but doing so on the Transfer Neo is even easier, and was much appreciated.

By the end of the day the clunky look of the battery module at the seat collar faded away, and I found myself becoming quite a fan of this new post. I am stoked Fox is offering this with 200mm drop, but I’m also bummed they did not opt to really push the boundaries and match the analog Transfers full 240mm. Fox reasoned that there were issues with packaging a 240mm drop wireless post in most frames, but we’d love to see this problem solved in the future. With that said I hope to see this 200mm post spec’d on more and more complete bikes we get in for testing.

Price: $859 | $1,149 CAD | €1100.00 EUR (ex VAT). Website: RideFox.com

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Barcelona ‘100% agreed’ to let Ilkay Gundogan leave on free transfer

The midfielder is off

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Share All sharing options for: Barcelona ‘100% agreed’ to let Ilkay Gundogan leave on free transfer

Ilkay Gundogan will leave Barcelona this summer and will do so on a free transfer after an unanimous agreement by the club.

The Catalans want to offload Gundogan after just one season to free up some space on the wage bill and register new signing Dani Olmo.

Gundogan has now agreed to wave goodbye to the club and is expected to head back to former club Manchester City .

The German arrived from City on a free transfer last summer and looks set to return the same way.

Fabrizio Romano has reported: “Understand Barcelona have 100% decided to let Ilkay Gündogan leave for free. Manchester City are working on details of the deal with Gündogan’s agent now in UK to get the comeback done. As revealed earlier, Pep Guardiola said YES. Up to Gündo’s green light.”

Understand Barcelona have 100% decided to let Ilkay Gündogan leave for free. Manchester City are working on details of the deal with Gündogan’s agent now in UK to get the comeback done. As revealed earlier, Pep Guardiola said YES. ✅ Up to Gündo’s green light ⏳ #MCFC pic.twitter.com/RZL1f1R7DT — Fabrizio Romano (@FabrizioRomano) August 20, 2024

Gundogan’s agent is said to be in Manchester taking care of the final details, and an agreement is expected soon.

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• Gundogan’s exit still not enough for Barca to register Olmo
• Barca talks for Chiesa heat up, Juve star willing to take pay cut
• Barcelona agree Vitor Roque loan deal with Real Betis
• Done deal: Gundogan agrees Man City return from Barca
• FC Barcelona News: 21 August 2024
• Barca show off fresh pictures of how Camp Nou will look

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Rumour Mongering: Liverpool and Valencia Close to Agreeing Mamardashvili Transfer

Giorgi Mamardashvili is now expected to stay at Valencia for the 2024-25 season rather than joining Bournemouth on loan.

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Share All sharing options for: Rumour Mongering: Liverpool and Valencia Close to Agreeing Mamardashvili Transfer

Liverpool’s efforts to sign 23-year-old Valencia and Georgia rising star goalkeeper Giorgi Mamardashvili which had appeared to have stalled over the weekend appear to have taken a significant step today and an agreement is now close.

That’s the latest from multiple sources in Spain, which suggest that rather than heading to Bournemouth on loan for the 2024-25 season the stopper will be loaned back to Valencia for the coming season before joining the Reds next summer.

Reports on potential cost point to a €30M fixed fee floor plus add-ons, which could see the deal end up around the €35M mark. Bournemouth were set to pay around €5M of that—and Valencia had recently signalled they wanted €5M more.

Now, of course, it will be Liverpool paying the entire fee. While as yet unreported, part of the reason for Mamardashvili having previously been set to join Bournemouth was because they could pay higher wages than Valencia can afford.

It seems likely, then, that Liverpool could also be expected to supplement the player’s wages this coming season at Valencia, subsidizing one more year for the imposing Georgian at the La Liga club in order to get the deal over the line.

While there have been concerns raised about Mamardashvili’s less than stellar distribution skills, when it comes to shot stopping and command of the penalty area the 23-year-old already rates out as a peer to Liverpool star Alisson Becker.

What this signing means for Alisson’s future, then, is anyone’s guess—though the consensus seems to be that Liverpool must expect him to want to move on from the club next summer in order to be closing on a deal for Mamardashvili now.

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• Liverpool’s Andy Robertson “Pain Free for First Time in Five Months”
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Official: Atlético Madrid sign Conor Gallagher from Chelsea

One of us no more

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The saga of Conor Gallagher is over, and after a few late twists and turns, it’s ended as expected, in his departure.

The 24-year-old tireless midfielder has completed his €40m transfer to Atlético Madrid today, signing a five-year contract with Diego Simeone’s side. (The move looked set to go ahead last week already, but the corresponding PSR transaction going the other way, Chelsea signing Samu Omorodion, collapsed in the final stretch. So instead we’re getting João Félix.)

But either way, Gallagher thus becomes the latest high-profile former Academy star to leave a legacy of just PureProfit™ rather than a legacy of games and goals and trophies. Of the ten recipients of our Academy Player of the Year award over the past decade, only Reece James and the most recent recipient, Alfie Gilchrist are still with the club (with Gilchrist out on loan at the moment).

Conor Gallagher has completed a permanent transfer to Atletico Madrid. We wish Conor the very best as he begins a new chapter in his career. — Chelsea FC (@ChelseaFC) August 21, 2024

Thanks to all his loans (Charlton, Swansea, West Brom, Crystal Palace), Conor leaves with fewer than 100 senior appearances for the club, with 10 goals and zero trophies. He was part of the 2018-19 Europa League squad, technically, but he was just 18 and he didn’t play at all.

All that said, Atléti looks like the perfect fit for Gallagher and I’m sure he’ll be a great success there.

Farewell, and thanks for everything!

Thank you, and good luck, Conor. pic.twitter.com/LZundZneOl — Chelsea FC (@ChelseaFC) August 21, 2024

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• Ipswich Town, Chelsea agree Armando Broja move — reports

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