A share transfer takes place when a current shareholder of the company, transfers all or some of the shares they hold to an existing or new shareholder.
The timeline to complete will largely depend on whether the shareholders receiving shares are existing shareholders. If they are not, then we will need their information and identification documents which can take some time for you to collect. From the point of signing the documents and submitting the application to ADGM, the transfer is usually finalised within 3 - 5 days.
The steps to complete this process are outlined below:
Step 1: review company's Articles of Association
The first step is to look at the company's Articles of Association. The model ADGM Articles of Association does not contain restrictions on transfers or rights of first refusal, but if your company has amended the Articles of Association, you must check to see if there are any initial approvals required and initiate this process straight away.
Step 2: update your cap table
We need to understand who is transferring shares and how many shares they are transferring. If they are transferring shares to multiple people we need to know how many shares are being transferred to each person. Updating your cap table will help us see the changes required.
Your updated cap table will also help us see if we need to make any additional filings - such as updating the Ultimate Beneficial Owner (UBO).
Step 3: scoping and invoice
We now have a clear picture of the changes taking place so we will issue our invoice for the share transfer and payment is required upfront. Our fees include our service fee and the filing fee payable to ADGM. Our service fees include:
the compliance review process,
the preparation of the company resolution, share transfer form and nominee declaration form,
submitting the application for the share transfer to ADGM,
updating the register of members (and register of Beneficial Owners if required), and
preparing and issuing the new share certificates following the completion of the share transfer.
Step 4: KYC
If the shares are being transferred to a person or corporate entity which is not a current shareholder, then you will need to provide Clara with their KYC documents.
Step 5: document preparation and signing
Clara will prepare the required documents which will then be sent for signature via DocuSign. Please note:
the share transfer form is to be signed by the shareholder transferring the shares and the individual/corporate entity receiving the shares. Both signatures need to be witnessed so we will need you to confirm the name and email address for the witness, and
If the recipient of the shares is a corporate entity that is not currently a shareholder, we will also prepare a board resolution to be signed by the board of directors of this entity agreeing to purchase the shares and appointing an individual as their signatory with respect to the ADGM company.
Step 6: filing and completion
Once the documents are signed and dated, Clara will update the Register of Members (ROM) of the company to reflect the changes. The signed documents and the ROM will be filed with ADGM to record the changes.
Once the changes are recorded, Clara will issue the new share certificates for signature by a director of the ADGM company and will direct you to cancel any share certificates affected by the share transfer.