Stamp duty on subscriber shares

Stamp duty on subscriber shares

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I am currently undertaking work for a firm of accountants which regularly buys companies off the shelf for its clients. These are always for one man bands and the stock transfer forms are almost always filed away in the client's file without being sent off to the Inland Revenue Stamp Office. What are the consequences of this? Are fines payable if this eventually comes to light. Does it mean that the formation agent's subscribers still own the company?

Many thanks for your help
Stephen O'Hara

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By JeremyNewman
30th Nov 2000 18:04

Sanctions for non-stamping
Two main issues arise - it's an offence under the Companies Act for shares to be registered in the compay register until they have been properly stamped - therefore, in theory, the shares cannot legally have been transferrred, even though beneficial ownership has passed.

Secondly, if there is ever a dispute as to ownership, unstamped documents are inadmissible in court - though the documents could be stamped (with attendant interest and penalties) if needed.

For these reasons, we always carry a stock of blank stamped forms to handle subscriber transfers.

Arguably, the sanctions are disproportionate to the "offence" and so could be overturned under the Human Rights Act.

On a practical level, I'd be worried if the forms were poppoed on the client file rather than kept with the register of members - files have a nasty habit of getting lost, but registers seem to go on for ever...

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