Share Transfer Form (Kenya)

A Share Transfer Form in Kenya transfers the assignor's rights or interests to the assignee on the terms it specifies.

Section 104 of the Companies Act No. 17 of 2015 governs share transfers in Kenya. Section 104(1) provides that a company may not register a transfer of shares unless a proper instrument of transfer has been delivered to the company. Section 104 also sets out the grounds on which a company may decline to register a transfer — namely, those permitted by the Act or the company's articles of association — and the procedure for notifying the transferor of refusal within two months of receiving the application. The two-month period for registration mirrors the two-month period for issuing share certificates under Section 97 of the same Act.

The Stamp Duty Act Cap. 480, administered by the Kenya Revenue Authority (KRA), requires the Share Transfer Form to be stamped before it is delivered to the company for registration. Stamp duty of 1% is payable on the consideration for the transfer (or the market value of the shares, whichever is higher). An unstamped transfer instrument is inadmissible in evidence and cannot be accepted by the company for registration. The stamping process is conducted through the KRA's domestic taxes department, and parties must submit the transfer instrument for assessment and payment of duty before presenting it to the company.

The Share Transfer Form is a distinct instrument from the Share Purchase Agreement. The SPA is the commercial agreement governing the terms of the sale — representations, warranties, conditions precedent, purchase price, and completion mechanics. The Share Transfer Form is the formal legal instrument that effects the actual transfer of title, lodged with the company to update its records. In many simple transactions — particularly transfers between family members, between co-founders, or pursuant to a will — there is no separate SPA and the Share Transfer Form alone documents the transaction.

For shares held in companies listed on the Nairobi Securities Exchange (NSE), the Central Depository and Settlement Corporation (CDSC) system handles the settlement of share transactions electronically, and a paper Share Transfer Form is not required. NSE-listed shares are dematerialised and transferred through the Central Depository System (CDS) accounts of the buyer and seller. Paper Share Transfer Forms are therefore used primarily for private limited companies incorporated under the Companies Act No. 17 of 2015.

The register of members maintained by the company under Section 93 of the Companies Act No. 17 of 2015 is updated by the company secretary or director upon receipt of a valid, stamped Share Transfer Form and the corresponding share certificate. The register entry is the conclusive evidence of membership, and the new certificate issued to the transferee under Section 97 is prima facie evidence of their title. Forms-legal.com provides this Kenya Share Transfer Form for private limited company share transactions governed by the Companies Act No. 17 of 2015.

A Share Transfer Form in Kenya is required under Section 104 of the Companies Act No. 17 of 2015 whenever shares in a Kenyan company are transferred from one person to another, and its use is mandatory rather than optional.

A Share Transfer Form is needed when shares are sold under a Share Purchase Agreement. Following the commercial terms being agreed in the SPA, the Share Transfer Form is the completion document that actually transfers legal title to the shares from the seller to the buyer and enables the company to update its register of members.

A Share Transfer Form is needed when shares are transferred as a gift between family members, friends, or business associates. A gift of shares in a Kenyan company must be documented by a properly executed and stamped Share Transfer Form to be effective under the Companies Act. Attempted transfers by verbal agreement or informal note are not sufficient to transfer legal title.

A Share Transfer Form is needed when shares devolve on the death of a shareholder and the personal representatives or beneficiaries wish to transfer the shares to the intended recipients under the deceased's will or the Law of Succession Act Cap. 160. Following the grant of probate or letters of administration by the High Court of Kenya, the personal representatives execute a Share Transfer Form to transfer the shares to the beneficiaries.

A Share Transfer Form is needed when a shareholder loan or pledge over shares is enforced and the lender takes legal ownership of the pledged shares. The enforcement process requires a transfer instrument to be executed by the pledging shareholder (or by the court on their behalf) to pass title to the lender or its nominee.

A Share Transfer Form is needed when implementing the exit of a shareholder under a buy-back arrangement or a drag-along or tag-along right under a shareholders' agreement. The exercise of these rights results in a transfer that must be documented in a Share Transfer Form and registered with the company.

A Share Transfer Form is needed when a corporate restructuring requires the internal transfer of shares between entities within a group — for example, where a subsidiary's shares are moved from one holding company to another as part of a group reorganisation. Even intra-group transfers require a properly executed and stamped Share Transfer Form under the Stamp Duty Act Cap. 480 and Section 104 of the Companies Act No. 17 of 2015.

A valid Share Transfer Form in Kenya compliant with Section 104 of the Companies Act No. 17 of 2015 and the Stamp Duty Act Cap. 480 must include the following essential elements.

Company Name and Registration Number: The full registered name of the company whose shares are being transferred, exactly as it appears in the Certificate of Incorporation issued by the Business Registration Service (BRS), and the company's unique BRS registration number. The class of shares being transferred (ordinary, preference, Class A, etc.) must be clearly specified.

Transferor Details: The full legal name, national identity card (ID) number or passport number, and address of the transferor (the person transferring the shares). For corporate transferors, the registered company name, BRS number, and registered address should be stated. The transferor confirms by signing the form that they are the registered holder of the shares being transferred.

Number of Shares Being Transferred: The exact number of shares being transferred, expressed both in numerals and words to prevent fraud or alteration. The certificate number(s) of the share certificate(s) being surrendered for cancellation should be listed.

Transferee Details: The full legal name, national identity card (ID) number or passport number, and address of the transferee (the person receiving the shares). For corporate transferees, the registered company name, BRS number, and registered address should be stated. The transferee acknowledges by signing the form that they agree to take the shares subject to the company's articles of association.

Consideration: The amount of consideration paid for the transfer, denominated in Kenya Shillings (KES). Where the transfer is a gift, the consideration should be stated as a nominal amount or the relationship between the parties should be described. The consideration stated on the form is used by the Kenya Revenue Authority (KRA) to assess stamp duty under the Stamp Duty Act Cap. 480 at 1% of the higher of the consideration and market value.

Date of Transfer: The date on which the transfer is agreed and the form is executed. This date is relevant for determining the commencement of the two-month period within which the company must register the transfer and issue new share certificates under Sections 97 and 104 of the Companies Act No. 17 of 2015.

Signatures of Transferor and Transferee: Both the transferor and the transferee must sign the Share Transfer Form. Where a party is a company, the form must be signed by two authorised signatories (directors, or a director and the company secretary) in accordance with the company's articles of association. Where a party is an individual who cannot sign (e.g., by reason of illness), the Companies Act permits execution by an authorised agent under a power of attorney executed before a Commissioner for Oaths.

Witness Details: The name, signature, address, and occupation of at least one witness to each party's signature. Witnesses must be independent of the parties — spouses and close relatives should not act as witnesses in Kenya's corporate practice.

KRA Stamp Duty Endorsement: Space on the form for the KRA stamp duty endorsement, evidencing that stamp duty has been assessed and paid. Without this endorsement, the company cannot lawfully accept the form for registration under the Stamp Duty Act Cap. 480.

Forms-legal.com provides this Kenya Share Transfer Form to assist private limited companies and their shareholders in completing share transfers in compliance with the Companies Act No. 17 of 2015 and the Stamp Duty Act Cap. 480. Company secretaries and advocates on the Law Society of Kenya (LSK) Roll should review the form against the company's specific articles before processing.