Stock investors typically focus on how to buy or sell shares of the stocks they own. Yet from time to time, you might want to make gifts of stock, either to family members, charities, or other people or institutions. The process of changing stock ownership is more complex than simply giving someone a piece of paper, and depending on how you own your shares, you'll need to follow a different process to complete your gift or transfer.
Three ways to own stock
There are three different ways you can hold shares of stock. Most people who have brokerage accounts hold shares in street name, meaning that the broker they use is the official registered owner of the shares. Your stock is allocated to you internally within the broker's operational records, but as far as the company whose shares you own is concerned, ownership remains with your broker. That means that you'll have to work with your broker to change stock ownership. For help choosing a broker for this, visit our broker center to compare what's available.
Alternatively, there are two situations in which you will be recognized as the official owner of your stock. If you hold paper stock certificates, your name will be reflected in the company's own records. Alternatively, some companies allow you to register shares directly, especially if the company offers a direct reinvestment investing plan. Either way, you'll work directly with the company's transfer agent to change stock ownership.
The process of changing stock ownership
If you own stock in street name, then you can work with your broker to change the ownership of some or all of your shares. Contact your broker to get the appropriate forms to complete. The process will be simpler if the new owner also has or will have an account with the same broker, because no change in the actual registration of the shares will be necessary. The broker will simply make the transfer on its own internal books. If you transfer shares outside your broker, you'll need a broker-to-broker transfer form, and your current broker will need instructions on how to make the transfer to the receiving broker.
If you have a stock certificate or have your shares registered directly, then the transfer process will involve the company's transfer agent. You can find out who your company's transfer agent is by contacting its investor relations department. Then, the transfer agent will have you send in any paper stock certificates you have, along with a letter of instruction to instruct it on how to change the ownership of the stock. You'll typically need to get a signature guarantee from a financial institution to satisfy the transfer agent, and you might also need other legal documents granting you authority to change ownership.
Giving shares of stock isn't as simple as giving cash, but it can be a better way to give both for you and for your intended recipient. With help, you can navigate the process of changing stock ownership the way you want.
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FAQs
The process of changing stock ownership
The broker will simply make the transfer on its own internal books. If you transfer shares outside your broker, you'll need a broker-to-broker transfer form, and your current broker will need instructions on how to make the transfer to the receiving broker.
Can you change ownership of shares? ›
Yes, private company shares can be transferred to a spouse or children. The company's articles of association may need to be amended to allow for this and the shareholders to approve it by passing a special resolution.
How do I transfer stocks from one account to another? ›
How to transfer stock between brokers
- You start the process by filling out a transfer initiation form. ...
- Your new broker communicates with your old broker. ...
- Your old broker must confirm, reject, or change your transfer information within three business days.
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How do I transfer stock to a family member after death? ›
After your death, the securities will automatically belong to the TOD beneficiary. All the beneficiary needs to do to claim them is show the transfer agent or broker a certified copy of the death certificate and proof of his or her identity.
What is the transfer procedure? ›
Transfer procedures are used whenever a buyer and seller transact between one another (the asset is transferred from the seller's custodian to the buyer's), or when the owner of an asset changes brokerage firms or transfers assets between one or more brokerage accounts that they control.
How do you transfer ownership of shares in the UK? ›
What you must do
- You must send it to the registrar of the company you have bought shares in with the stock transfer form and share certificate. The address of the registrar is on the share certificate.
- The registrar will issue you with your own share certificate.
I/ We hereby request the Company to kindly consider my/ our request for transmission of the aforesaid shares in my/ our name on the basis of execution of Affidavit and Indemnity Bond without submitting any of the aforesaid legal documents. Please send the specimen of the said documents to be executed by me/ us.
What documents are required to transfer shares? ›
Required documents include a Share Transfer Deed, Share Certificate, PAN Card of the buyer, Board Resolution, NOC from the seller, and possibly an Indemnity Bond. Is stamp duty required for a share transfer? Yes, the Share Transfer Deed requires stamp duty, which varies by state.
Does it cost money to transfer stocks? ›
The potential fees vary among brokers. Some brokerage firms may charge a fee as a way to refrain investors from transferring stocks and make the process harder. However, the new broker of your choice may guide you through the process or even be willing to cover the fees.
Many brokers charge a fee when you transfer brokerage account assets. The typical fee ranges from about $50 to $100, but not every broker has an account transfer fee. The only way to know how much your old broker charges is to check its list of fees or contact customer service.
What are the charges for stock transfer? ›
A maximum of 5 securities (ISINs) can be transferred per DIS. Use the DIS Annexure form (PDF) to transfer more than 5 securities. The charges to transfer shares in an off-market transaction are 0.03% of the transfer value or ₹25 per ISIN, whichever is higher, + 18% GST.
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