If you own shares of stocks in a Philippine-registered company that is not publicly traded, this is considered as your personal property. Therefore, you have the right to transfer your share ownership to another individual, group, or organization. However, shares are an intangible personal property, and the manner of transferring ownership is regulated by the laws such as the Revised Corporation Code of the Philippines.
Section 62 of the Code reads:
Certificate of Stock and Transfer of Shares. – xxx
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.
A transfer of shares provider in the Philippines, such as FileDocsPhil, can assist you in transferring your shares as a gift, through a purchase, legal assignment, or conveyance.
How can a transfer of shares provider in the Philippines help you?
There are several steps involved in transferring shares that a Philippines-based provider can help you with. These are:
1) Gathering the necessary documents
Certain documents, such as the stock certificate, must be prepared ahead of time. This certificate proves the ownership of the shares of stock and, hence, signifies your right to transfer the shares. The certificate is proof that you are the stockholder. The stock certificate includes information such as the numbered stock certificate, issuer corporation, number of shares, par value, and ownership limitations, if there are any.
Other documents you will need are:
Certificate Authorizing Registration (CAR)
CAR, which is required by the Bureau of Internal Revenue (BIR) for non-PSE traded stocks, allows recording the transfer of stocks in the corporation’s book. In addition, the BIR will conduct an assessment of the Capital Gains and Documentary Stamp taxes to be paid. FileDocsPhil specializes in electronic CAR or eCAR.
Proof of shares acquisition
BIR needs to establish how the shares are acquired so you may transfer them. Documentary evidence could be a Deed of Sale, Deed of Donation, Deed of Partition, or Subscription Agreement.
Audited financial statements and other documents as required by the Revenue District Office
Additional requirements may be required, depending on the nature of the transfer of shares.
2) Endorsing the stock certificate
After obtaining the required documents, endorsement follows. You need to sign the counterfoil or the back of the certificate, which signifies an endorsement of the shares from the current owner to the new owner.
3) Delivering the stock certificate
Once endorsed, the actual transfer shall follow. Without endorsement, no actual transfer of shares occurs. As such, the stock certificate must be supported by a deed showing proof of transfer. This can be a Deed of Sale, Deed of Donation, or a similar instrument that can validate the transfer.
4) Recording the transfer in the books
Upon a successful transfer of shares, the final step is recording such in the corporation’s stock and transfer book. Failure to record the delivery of the endorsed stock certificate invalidates the transfer. The following information should appear in the book record:
- Name(s) of the original owner transferring the shares
- Name(s) of the individuals whom the shares are transferred to
- Number of shares transferred
- Number of stock certificate(s) involved in the transfer
5) Completing the transfer
After the BIR CAR, the transfer must be completed through filing the GIS (General Information Sheet) at the Securities and Exchange Commission (SEC). The new shareholder, or for whom the shares are transferred, must provide the following information:
- Complete name
- Complete address
- TIN (Tax Identification Number)
- Number of shares being held
What government entities are involved in the transferring of shares?
Aside from the BIR, the SEC is also involved in transferring shares.
The transfer of shares must be cleared with the BIR first before being transferred and reflected in SEC’s GIS.
What makes the transfer of shares of stock valid?
At least three things solidify the validity of the transfer of stocks. These are:
- The stock certificate must be duly endorsed by the transferor (previous owner) to the transferee (new owner)
- The transferee must present the CAR to the corporate secretary
- The transfer must be duly recorded in the books of the corporation
FileDocsPhil can help with the transferring of shares
The transfer of shares can be a cumbersome process. FileDocsPhil can surely assist you in every step of the transfer.
The final price for each transfer of shares assistance order will depend on where you are at in the process. For instance, if you have already gathered the necessary documents, FileDocsPhil only needs to guide you on the next steps. Nevertheless, the average transfer of shares processing may take up to 40 business days.