Our shares of stock transfer and registration services provide a rigorous legal oversight necessary to navigate the transition of corporate ownership. We manage the mandatory three-tier process involving the BIR, SEC, and the corporate secretary and ensure that your stock ownership is legally recognized and unassailable.
What You Should Know About Shares of Stock Transfers in the Philippines
The Philippine law treats shares of stocks as personal property, and similar to other properties, these can be sold, assigned, transferred, or conveyed to another person or entity through legal agreements that outline the terms and conditions, including the taxes and fees.
As provided in Section 62 (Certificate of Stock and Transfer of Shares) of R.A. 11232, also known as the “Revised Corporation Code of the Philippines,” “Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates endorsed 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.”
Modes of Stock Transfers
Here are the different ways stocks can be transferred in the Philippines:
- Onerous Transfer (Sale/Assignment). This is the most common transfer where shares are sold for a consideration, triggering Capital Gains Tax (CGT) and Documentary Stamp Tax (DST).
- Gratuitous Transfer (Donation). This involves voluntary gifting of shares, often for estate planning purposes, which requires the payment of Donor’s Tax.
- Succession (Inheritance). This is a transfer of shares from a deceased stockholder to their heirs, necessitating either an Extrajudicial Settlement or a court-ordered distribution.
- Corporate Restructuring. This transfer of shares forms part of a merger, consolidation, or tax-free exchange under Section 40(C)(2) of the Tax Code.
What Duran & Duran-Schulze Law Does
Duran & Duran-Schulze Law acts as legal counsel assisting corporations and shareholders with shares of stock transfer and registration. We review corporate documents, draft and execute share transfer agreements, facilitate board approvals, endorse and update stock certificates, and oversee proper filing of taxes and regulatory requirements.
Our Shares of Stock Transfer and Registration Services
We provide an end-to-end management of the stock share conveyance process:
Deed Preparation and Endorsement Support
We draft deeds and ensure proper endorsements of the original stock certificates. For corporations with a right of first refusal, we manage the necessary notices to the board and shareholders to ensure the transfer adheres to the company’s bylaws.
BIR Tax Compliance and eCAR Processing
We assist in the computation of the Capital Gains Tax (15% flat rate for non-listed shares) and Documentary Stamp Tax. We manage the BIR filings and the application for Electronic Certificate Authorizing Registration (eCAR).
Corporate Secretary Liaison and STB Update
We coordinate with the corporate secretary for the formal cancellation of the old shares and the issuance of new stock certificates. We ensure the transfer is accurately recorded in the Stock and Transfer Book (STB).
SEC Reporting and GIS Filing
Within 30 days of the corporate update, we assist in the filing of an amended General Information Sheet (GIS) with the SEC. This ensures that the public record reflects the new shareholding and keeps the company in good standing.
How to Get Started
For inquiries on requirements, processes, and fees, contact Duran & Duran-Schulze Law at (+632) 8478 5826, (+63) 917 194 0482, or info@duranschulze.com, or simply complete the form on this page. Our office is located at 1210 High Street South Corporate Plaza Tower 2, 26th Street, Bonifacio Global City, Taguig, Metro Manila, Philippines.
Need to Consult a Lawyer?
You can book an online or in-person consultation with Atty. March. Choose a 30-minute or 1-hour session, fill out the form with your information and preferred schedule, pay the fee via PayPal, and meet with the attorney at the scheduled time.
Atty. Marie Christine Duran-Schulze
Managing Partner [Read Profile]
Business and Corporate Law, Family Law, Litigation, Immigration Laws, Real Estate, Labor Management, and HR Services
Shares of Stock Transfer and Registration FAQs
For your reference and guidance, here are some frequently asked questions about shares of stock transfer and registration in the Philippines:
Generally, shares of stock are personal property and are freely transferable. However, the company’s bylaws or shareholders’ agreements may contain valid restrictions, such as a “Right of First Refusal,” which must be respected before the transfer can be registered in the corporate books.
A Certificate Authorizing Registration (CAR) is a tax clearance certificate issued by the Bureau of Internal Revenue as mandated by the National Internal Revenue Code (NIRC) and serves as a proof of payment in full of all the taxes incurred in the sale, exchange, or barter of shares of stocks that are not traded on the stock exchange.
It is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale. The current CGT rate is at fifteen percent (15%) (for individuals, domestic corporations, and foreign corporations) applied to the net capital gains after the allowable deductions (costs of acquisition).
While both convey ownership, a Deed of Sale specifically implies a monetary consideration (onerous), whereas a Deed of Assignment is a broader instrument that can be used for various modes of transfer, including capital contributions or debt-to-equity swaps.
The transfer follows the rules of succession. Heirs must execute either a Deed of Extrajudicial Settlement (if there is no will) or undergo Probate (if a will exists). In addition to the standard BIR eCAR for estate tax, the Corporate Secretary will require proof of publication of the estate settlement and an Heir’s Bond if the transfer is requested within two years of the decedent’s death.
If the transfer is not entered in the Stock and Transfer Book (STB), the new shareholder may not be recognized legally, leading to disputes or unenforceable ownership rights.
While corporate law does not impose strict deadlines, timely entry into the Stock and Transfer Book (STB) is critical to establish legal ownership and for tax reporting purposes.
