You have just decided to transfer your shares of stocks as part of your estate planning. However, you might not know where should you begin or how to process the transfer. In the Philippines, transferring shares of stock is not as simple as you think. There are legal procedures and tax obligations that must be carefully followed.
We’ve created this article to help you understand and navigate the process, and how important to have an assistance with a service provider such FileDocsPhil to make the transfer smoother and hassle-free.
What is a Share of Stock?
A shares of stock represent ownership in a corporation. According to Philippine law, shares of stocks in a corporation that were not traded in the Philippine Stock Exchange (PSE) are considered as personal property. This only means that the holder of shares, known as a shareholder or stockholder, has rights to transfer, sell, donate, assign, or convey his property to another.
The legal framework for stock transfers in the Philippines is primarily governed by the Revised Corporation Code of the Philippines (Republic Act No. 11232). Key provisions related to the transfer of shares include:
Section 62 – Certificate of Stock and Transfer of Shares
The stock certificates represent ownership in a corporation and must be signed by the authorized officers, president or vice president, countersigned by the secretary or assistant secretary, and sealed with the corporation’s seal, in accordance with the bylaws. Shares are personal property and can be transferred by delivering endorsed certificates.
However, the transfer is only valid if recorded in the corporation’s stock and transfer book, which includes the names of parties, date, certificate details, and the number of shares. Additionally, the SEC may allow certain corporations to issue shares in electronic or uncertificated form.
Shares with unpaid claims cannot be transferred until the claims are settled.
Section 63 – Issuance of Stock Certificates
A corporation cannot issue stock certificates to a subscriber until the full subscription amount, including any interest or delinquency-related expenses, has been fully paid.

Republic Act No. 11232 – Revised Corporation Code of the Philippines
How to Process Share Transfer
1. Verify Share Ownership and Restrictions
Before initiating a transfer, verify the ownership of shares and review the corporation’s by-laws and stockholder agreements. Some agreements, such as the right of first refusal, may restrict the transfer.
2. Deed of Absolute Sale of Shares of Stocks or Transfer Agreement
A Deed of Sale of Shares of Stock is a legal document that records the transaction between the seller and the buyer. It must include the names and details of the seller and buyer, the number and class of shares being transferred, and the sale price and terms.
3. Stock Certificate
The seller must endorse the original stock certificate. If the stock certificate is lost, an affidavit of loss must be prepared.
4. Payment of Taxes
Applicable taxes must be paid at the Bureau of Internal Revenue (BIR).
Capital Gains Tax (CGT). This is paid by the individual giving away the share. It is imposed on any earnings the giver may have made from the exchange. If the share was given as a gift, the gifter will still have to pay this tax if said share increased in value while it was under the gifter’s ownership. The rate for non-resident foreign corporations is 5% for the first Php100,000 of net gain, and 10% on amounts exceeding Php100,000. Meanwhile, the rate for resident individuals and domestic corporations is 15% of net gain (for non-listed shares).
Documentary Stamp Tax (DST). This is a tax imposed on any documents evidencing the transfer of shares. Php 1.50 for every Php 200 of the par value or selling price, whichever is higher.
Donor’s Tax. This only applies if the transfer is through donation or gift. Its rate is 6% computed on the basis of the total gifts exceeding P250,000 yearly.
5. Certificate Authorizing Registration (eCAR)
After tax payments, the BIR issues an eCAR or a Certificate of Tax Clearance, authorizing the transfer.
6. Update Corporate Records
The buyer must do the following:
Present the endorsed stock certificate and Deed of Sale to the corporate secretary.
Request for the issuance of a new stock certificate in their name.
Ensure that the transfer is recorded in the stock and transfer book of the corporation.
7. Notify the Securities and Exchange Commission (SEC)
Corporations must update the General Information Sheet (GIS) filed annually with the SEC to reflect changes in stock ownership.
Sounds Overwhelming? It doesn’t have to be!
Transferring shares of stock involves navigating legal requirements, preparing accurate documentation, and paying taxes on time. FileDocsPhil simplifies this process by providing expert assistance in document preparation, tax computation, and coordination with the BIR and SEC. With Filedocsphil, you can save time, ensure compliance, and avoid costly errors.
Let FileDocsPhil Do the Work!
Need further information and assistance in Transfer of Shares of Stocks? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+63) 917 149 2337 or send an email to info@filedocsphil.com for more information or simply message us through the live chat for more information.