Changing Company Ownership in the UK: What Really Happens in Law

Changing who “owns” a UK company feels like it should be simple: you agree a price, sign a contract, the money lands, everyone goes for a drink.

But in law, that moment sits on top of a much bigger structure. Under the Companies Act 2006, ownership isn’t just “who paid for what” – it’s who appears on the share register, who shows up as a Person with Significant Control (PSC) at Companies House, whether Stamp Duty has been dealt with properly, and, in some deals, what happens to employees under TUPE.

Get those pieces right and the change of ownership is clean, recognisable and robust if anyone ever looks under the bonnet – a future buyer, HMRC, Companies House, or a disgruntled minority shareholder. Get them wrong and you can end up with a deal that feels complete commercially, but is messy or even defective in law, with arguments later about who actually owns the company and what obligations were triggered along the way.

This article unpacks that legal machinery in plain English: how ownership is defined, how shares actually move, when control has to be made public, where tax and employment rules bite, and what all of that means when you’re planning a real-world change in who runs the company.

Who really “owns” the company?

In UK company law, you don’t own a company just because you say you do, or because you’ve paid for shares. You own it because the official share register says so.

Section 112 of the Companies Act 2006 says that (with some nuances) a person becomes a member if they agree to become a member and their name is entered in the register of members. That register is prima facie evidence of membership, which means the company is entitled to treat it as the authoritative list of who its shareholders are.

In practice, when you “sell” shares you have two pieces of the puzzle: a contract saying X will sell and Y will buy, and the register, which decides who the law treats as the shareholder.

If those don’t match – for example, the contract is signed but the register is never updated – you’ve created a legal grey area. On the day everything is friendly, no one minds. Five years later, when a buyer or investor does due diligence and finds that the register, the contracts and Companies House all tell different stories, it can get expensive very quickly.

How shares actually change hands

The Companies Act doesn’t let a company casually scribble on its share register.

Section 770 says the company may not register a transfer of shares unless a “proper instrument of transfer” has been delivered to it (or a limited exception applies). In real life, that “proper instrument” is almost always a stock transfer form – usually a J30 for fully paid shares – signed by the seller, setting out who is buying, what they’re buying and what they’re paying.

Once that form is in, the company has a legal job to do. Under the Act it must either register the transfer and update the share register, or formally refuse it in line with its articles, usually within about two months, and then issue or update the relevant share certificates.

On top of that, you have the company’s articles of association and any shareholders’ agreement. Those often say things like: existing shareholders must be offered the shares first, the board has a right to refuse certain transfers, or shares can’t be sold at all for a period after an investment.

If the board registers a transfer in breach of those rules, the register, the contracts and the constitution stop lining up. The more time passes, the harder that is to unwind.

So when you change ownership by selling shares, the “boring” bit – stock transfer forms, board minutes, register updates – is actually the legal heart of the transaction.

Making control visible: PSC rules after the recent reforms

Modern UK company law doesn’t just care who owns and controls companies – it cares that powerful people can’t hide.

Part 21A of the Companies Act 2006 and the PSC Regulations require most UK companies to identify their People with Significant Control – broadly, those with more than 25% of the shares or votes, or otherwise significant influence or control – and to report that information to Companies House.

Historically, companies had to keep a local PSC register as well as filing PSC information centrally. Following reforms under the Economic Crime and Corporate Transparency Act 2023, which took effect in November 2025, companies no longer keep a separate local PSC register. PSC details are now held centrally at Companies House. You still have to identify who your PSCs are and keep your own records straight, but the official PSC record the law relies on is the Companies House register, which must be kept accurate and up to date.

What this means in practice: if a new shareholder comes in above 25%, or an existing shareholder crosses a key control threshold, the company shouldn’t just tweak the cap table. It needs to work out whether that person is now a PSC (or has ceased to be one), and then update the PSC information at Companies House within the required time.

If it doesn’t, it’s not just being scruffy. Part 21A creates specific criminal offences for companies and officers who don’t investigate PSCs properly or fail to update the information, and there are powers to restrict the rights of people who refuse to co-operate.

So a “simple” change in ownership can easily have a PSC knock-on effect that needs to be picked up and filed.

When money moves: Stamp Duty on share transfers

As soon as money changes hands for shares, HMRC joins the conversation.

If you buy shares using a stock transfer form and the transaction is over £1,000, you normally have to pay Stamp Duty at 0.5%, rounded up to the nearest £5. The buyer (or their advisers) must send the form to HMRC (now typically by email, with electronic payment) and do it within 30 days of the date of execution.

HMRC then confirms the instrument is “duly stamped”. There’s no longer a literal rubber stamp, but the concept still matters.

An unstamped form doesn’t automatically make the share transfer invalid. But it does leave you with a potential tax problem (interest and penalties if HMRC looks back), and an awkward gap in the paperwork if, later, someone is trying to prove a clean chain of title.

For anything beyond tiny internal reallocations, it’s worth building Stamp Duty into the timetable from the start rather than treating it as an afterthought.

Business versus company: when TUPE gets involved

Everything above assumes you’re changing ownership by moving shares. But sometimes the parties don’t want the whole legal vehicle – they just want the trading business.

In that case, the seller’s company transfers its business and assets – goodwill, brand, IP, contracts, stock, equipment – to a buyer, often a different company. Legally, the employer on the payslip changes too.

That’s where the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) comes in. TUPE applies where there is a “relevant transfer” – broadly, a transfer of an economic entity that retains its identity, or certain outsourcing/insourcing situations known as “service provision changes”.

If there is a relevant transfer and employees are assigned to that business, their employment normally transfers automatically to the buyer. Their continuity of employment and most rights and liabilities come too, and both old and new employers have duties to inform, and in many cases consult, affected employees or their representatives.

TUPE also makes dismissals or contractual changes risky if the main reason is the transfer itself, unless there is a genuine “economic, technical or organisational” reason and a fair process.

So if you change ownership by selling assets rather than shares, TUPE is not a side issue. It’s central. You can’t simply “pick the staff you want” and leave the rest behind without thinking very carefully about the regulations and the potential claims.

By contrast, in a straight share sale, the employer remains the same legal entity. Shareholders change; contracts of employment usually do not. TUPE is generally not engaged in that scenario, though there may still be HR and retention issues to manage.

Directors in the middle of it all

Directors sit at the junction of all of this. They are the ones passing resolutions to approve transfers, deciding whether to refuse them, signing off on PSC filings and choosing between a share sale and an asset sale structure.

Under the Companies Act 2006 they owe statutory duties: to act within their powers, to promote the success of the company for the benefit of its members as a whole, and to exercise reasonable care, skill and diligence. If they wave through ownership changes in breach of the articles or a shareholders’ agreement, without thinking about the impact on minorities, or without keeping registers and filings in order, they can face civil claims for breach of duty.

And because the Act and related regulations contain a long list of specific criminal offences linked to failures to keep proper registers and file on time, persistent non-compliance can also have regulatory consequences.

In short: it’s not “just paperwork”.

A quick example: a seemingly simple 80% sale

Imagine a buyer acquires 80% of a small private company from its founder.

Commercially, it’s straightforward: they agree on a price, sign a share purchase agreement, and complete.

Legally, a lot is happening at once. Stock transfer forms are signed so the company can lawfully register the transfers under section 770. The board checks the articles and shareholders’ agreement, approves the transfers, updates the register of members, and issues new share certificates.

The buyer calculates and pays Stamp Duty at 0.5% within 30 days, because the consideration exceeds £1,000. The company updates its PSC information at Companies House, because someone new now holds well over 25% of the shares and likely crosses higher control thresholds. The confirmation statement and any officer changes are kept in sync so that, on paper, the public record matches what has actually been agreed.

From the outside, it’s “just a change of ownership”. Underneath, it’s a carefully choreographed interaction between company law, tax and transparency rules.

Why getting legal help early actually saves you time (and money)

Looking at that “simple” 80% sale, it’s easy to see why DIY can be risky.

On the surface, it’s just a buyer, a seller and an agreed price. Underneath, you’re dealing with your company’s constitution, Companies Act rules on transfers and registers, PSC and tax obligations, and - in some structures - TUPE and employment law. None of those things are impossibly complex on their own, but they all interact.

A neat SPA with sloppy register updates, missed PSC filings or no thought for TUPE can leave you with a deal that “works” commercially but is vulnerable when someone scrutinises it later – a new investor, a buyer, a regulator or a disgruntled minority shareholder.

That’s where getting legal help early is worth it. A good lawyer will map out whether your change of ownership should be a share sale, asset sale or internal restructure; check your articles, shareholder agreements and cap table so you don’t trip over hidden restrictions; draft or review the share purchase agreement and supporting documents (stock transfer forms, board minutes, disclosure letter, shareholders’ deed, and so on); keep Companies House, PSC and register updates aligned with what the contracts actually say; and flag where you need a specialist tax adviser or employment advice (for example, if TUPE might apply in an asset deal).

If you’re not sure which route makes sense, or you just want someone to sanity-check your plans before you start moving pieces around, that’s usually the right moment to seek legal expertise – not the day before completion.

Key takeaways

• Ownership follows the share register. For most practical purposes, the law treats the person on the register of members as the shareholder, not just the person who signed the deal.
  
• A signed contract isn’t enough. You also need a valid stock transfer form, board approval where required, and correct updates to the register to make the change of ownership “real” in law.
  
• Big shifts in ownership can trigger PSC duties. Crossing significant control thresholds means you may have to update PSC information at Companies House – and ignoring that can be a criminal offence for the company and its officers.
  
• Money on the table means Stamp Duty. Share transfers over £1,000 using a stock transfer form usually attract Stamp Duty at 0.5%, payable to HMRC within 30 days.
  
• Changing who owns the business is different from changing who owns the company. Asset and business sales can trigger TUPE, bringing automatic employee transfers and consultation duties; share sales usually don’t.

If you would like a consultation on changing company ownership, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.