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 do 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. Payment is required upfront.
Clara's fees for a share transfer are USD 775 + VAT which includes the USD 100 filing fee payable to ADGM. This fee includes up to two transfers, following which an additional feel of USD 125 per transfer applies. If we need to change the UBO an additional fee of USD 325 + VAT will apply.
By way of example, if a shareholder is transferring shares to 4 shareholders the fee would be USD 775 + (USD 125 x2). The total fee would be USD 1,025 + VAT.
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
Unless the company's Articles state otherwise, the standard requirements are:
written resolution of the board of directors of the company approving the share transfer,
a share transfer form 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
a nominee declaration form to confirm that the shareholders are not acting as nominees for 3rd parties.
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.
Clara will prepare the above documents and these will be sent for signature over DocuSign.
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.
It should be noted that even though it may take a couple of days following the signing of the resolution to complete the process, the share transfer takes effect on the date of the board resolution. This will be the date that the changes are entered onto the Register of Members.