Transfers Of Shares In Un-Listed Companies - To Be Or Not To Be?

The assistance of Claire Latham, Solicitor, in writing this article is appreciated.

It is vital that the requirements for a valid transfer of shares in an un-listed company are complied with. Otherwise, the validity of ongoing resolutions passed by a company may be challenged, and those who believed themselves to be shareholders may find they lack the voting and dividend rights they thought they had. In the recent decisions of Ku v Song [2007] FCA 1189 and Beck v Tuckey [2007] NSWSC 1065, these requirements were considered.

Ku v Song

In Ku v Song there was a verbal agreement that the owner of shares in an un-listed company, Mr Ku, would transfer those shares to Mr Song. Mr Ku prepared a 'Change to Company Details Form' showing this transfer and lodged it with ASIC. ASIC altered its records accordingly. Mr Ku did not, however, sign any share transfer form or deliver such a form to the company in which the shares were held.

The company then passed...