What is a share transfer? 

A share transfer is when the ownership of one or more shares is transferred from one party to another. Common forms of share transfer are sale, gift and inheritance. However, for a share transfer to be done properly, i.e. to be legally approved, it must follow a predetermined process. 

How a share transfer works: step by step

Below we explain the steps involved in a general share transfer process. 

• Make sure that there are no obstacles to the transfer in the articles of association. Examples of obstacles to the transfer being possible are pre-emption rights, consent requirements and pre-emption clause. 
• Draw up a share transfer agreement that includes details of the type of share, the price per share, the number of shares, the transfer date and any other relevant terms. 
• The transaction is carried out by the buyer paying money to the seller, and the buyer then receiving the shares she paid for. 
• The change in the company's ownership structure is then recorded in the company's share register. This is the responsibility of the company, not the buyer. 
• Finally, it must be ensured that the transfer is taxed correctly, for example the seller may have to pay capital gains tax. There is no inheritance or gift tax in Sweden at the time of writing (2024). 

NB: If the transfer of shares is not an inheritance or a gift, but a sale, the due diligence step is normally included. Due diligence means that the buyer carefully checks whether the company has large/hidden debts or other types of problems. 

Which companies are making share transfers? 

Companies that make share transfers are:

• Private companies such as family businesses and other companies that have unlisted shares such as Klarna.
• Public companies whose shares are bought and sold on the stock exchange, i.e. listed companies such as Tesla and Ericsson. 

Frequently asked questions

Below we provide you with answers to frequently asked questions related to share transfers. 

What is a share transfer agreement?

A share transfer agreement is a legal document that sets out the terms of the transfer, such as the number of shares, price, transfer date and type of shares. 

How do pre-emption rights affect a share transfer? 

Pre-emption rights affect a share transfer in that existing shareholders must be asked to buy the shares before external parties receive that offer. Disregarding the right of first refusal in a transfer may invalidate the transaction.  

What taxes need to be paid on a share transfer?

A common tax on the sale of shares is that the seller pays capital gains tax, but there is no tax on inheritance or gift transfers in Sweden today (2024). 

Can shares be transferred to anyone? 

Yes, if it is a listed company, for example on the Stockholm Stock Exchange, but no, if it is a private company. Private companies may have specific provisions on the transfer of shares in their articles of association.