Quick answer
Shares in a Sdn. Bhd. are transferred with a proper instrument of transfer (Companies Act 2016, s.105), which must be stamped by LHDN; the directors then register or refuse the transfer (s.106) and the register of members is updated. Stamp duty on the transfer is payable by the parties to LHDN and is not part of our fee.
Last reviewed： · Reviewed by：ONEKEY BIZ compliance team
01
Overview
A share transfer moves ownership of existing shares from one person to another — a founder exiting, a new partner buying in, shares moving within a family, or the sale of the whole company. It does not change the company's paid-up capital; that only happens when new shares are allotted.
The Companies Act 2016 requires a proper instrument of transfer (Section 105). The instrument must be stamped by LHDN under the Stamp Act 1949 before the company can register it, and the directors must then register the transfer or give notice of refusal (Section 106). The register of members is updated and new share certificates are issued.
Two things decide how smooth it is. First, the constitution may restrict transfers — for example requiring shares to be offered to existing shareholders first. Second, stamp duty is assessed on the transfer, so the price and the value of the shares need supporting documents such as the latest accounts. We check both before anyone signs.
Who needs this
- A shareholder selling to a new investor or partner
- Founders exiting a company
- Family or group restructuring of shareholdings
- Buyers of an existing Sdn. Bhd.
02
The form, the duty, and how the price is tested
A transfer of shares in a Malaysian private company is effected by an instrument of transfer under Section 105 of the Companies Act 2016 — the form commonly called Form 32A. It is signed by the transferor and transferee, stamped by LHDN under the Stamp Act 1949, and only then can the company register the transfer and update its register of members.
Stamp duty is 0.3% — RM3 for every RM1,000 or part of it — charged on the higher of the consideration paid and the market value of the shares. For an unlisted company, market value is computed on net tangible assets. LHDN has withdrawn the older valuation methods, so par value is no longer an accepted basis: transferring shares in a profitable company at RM1 par does not produce RM1 of duty.
That single point is where most home-made share transfers unravel. A company with RM1,000 issued capital but RM800,000 of retained earnings has a net tangible asset value far above par, and the duty follows the assets. The valuation has to be prepared from the latest accounts before the instrument is executed, not argued about after LHDN assesses it.
| Basis | Accepted by LHDN | |
|---|---|---|
| Par value | Nominal value of the shares | No longer accepted |
| Consideration | The price actually paid | Yes — if it is the higher |
| Net tangible assets | Assets less liabilities, from the latest accounts | Yes — if it is the higher |
| Price-earnings ratio | Earnings multiple | Withdrawn |
| Rate applied | 0.3% (RM3 per RM1,000 or part thereof) | Stamp Act 1949 |
Duty is charged on whichever is higher — the consideration or the net tangible asset value. Malaysia is phasing in stamp duty self-assessment from 1 January 2026, with instruments transferring ownership scheduled to follow from 1 January 2027.
03
What has to happen around the form
The instrument is the visible part; the corporate steps around it are what make the transfer valid. The constitution has to be checked first — many private companies carry pre-emption rights that require the shares to be offered to existing members before an outsider, and a transfer that ignores them can be challenged later.
Then the board has to approve the transfer by directors' resolution, the share certificates are cancelled and reissued, the register of members is updated, and the change is lodged with SSM. Under the Corporate Registry System, beneficial ownership information has to reflect the new holding as well, which for corporate transferees means tracing through to the individuals behind them.
We prepare the full set — pre-emption waiver where needed, board resolution, Form 32A, valuation for stamping, new certificates and the SSM lodgement — and handle the stamping so the transfer is complete rather than merely signed. A signed but unstamped instrument is not something the company can act on.
04
Documents you need to prepare
Transferor & transferee
- IC or passport copy of both parties
- Residential address of the transferee
- Agreed number of shares and price
Valuation for stamping
- Latest audited or management accounts of the company
- Sale and purchase agreement, if any
Company
- Current register of members and share certificates
- Constitution, if any (checked for transfer restrictions)
- If the transfer changes who ultimately owns or controls the company, the register of beneficial owners must also be updated.
- Licences and approvals tied to ownership (for example foreign equity conditions) may need to be notified.
05
How to get it done with ONEKEY BIZ
- 1Restriction check Day 1
We review the constitution and any shareholder agreement.
- 2Transfer documents Day 1–2
We prepare the instrument of transfer and board resolution.
- 3LHDN stamping Week 1
The instrument is submitted for stamping; stamp duty is paid.
- 4Registration Week 1–2
Directors approve and register the transfer.
- 5Records & SSM Done
Register of members, share certificates and SSM records updated.
You do
- Agree the price and number of shares
- Provide accounts for stamping
- Pay the stamp duty assessed by LHDN
We do
- Check transfer restrictions
- Prepare the instrument and resolutions
- Handle LHDN stamping
- Update registers, certificates and SSM records
06
What you receive
The form of transfer bearing LHDN's stamp — your legal proof of the transfer.
Board approval to register the new shareholder.
Issued to the transferee; the transferor's certificate is cancelled.
Showing the new shareholding, with SSM records updated.
Official sources
Frequently asked questions
Who pays the stamp duty?
It is paid to LHDN by the parties, normally the buyer unless agreed otherwise. It is not included in our fee.
Does a share transfer change paid-up capital?
No. Only allotting new shares changes paid-up capital.
Can the directors refuse to register a transfer?
Yes, where the constitution allows; they must then give notice of refusal under s.106.