How to Transfer Shares of Stock in the Philippines: Steps, Taxes and eCAR (2026)

Atty. Yasser R. Aureada, CPA

Apr 2

11 min read

Updated: 2 days ago

Short answer: To transfer shares of a closely held Philippine corporation, the owner signs a deed of sale, assignment or donation and delivers the endorsed stock certificate (Section 62, Revised Corporation Code). A sale is taxed at 15% of any net gain, a gift draws donor's tax, and documentary stamp tax is ₱1.50 per ₱200 of par value. After the BIR issues its electronic Certificate Authorizing Registration (eCAR), the corporate secretary records the transfer in the stock and transfer book. Until recorded, the transfer binds only the parties.

How do you transfer shares of stock to another person in the Philippines?

Shares of stock are personal property. The owner transfers them by delivering the stock certificate, endorsed by the owner, an attorney-in-fact or another person legally authorized to make the transfer (Section 62, Revised Corporation Code (RCC), Republic Act (RA) No. 11232).

The Supreme Court reads this as three minimum requisites: delivery of the certificate, endorsement by the owner or the owner's attorney-in-fact, and, for validity against third parties, recording in the corporation's books (Teng v. Securities and Exchange Commission, G.R. No. 184332, February 17, 2016).

So a proper transfer has three parts:

Between the parties: a written deed and delivery of the endorsed certificate.
With the BIR: tax returns and payments, then the eCAR.
With the corporation: recording in the stock and transfer book, and a new certificate.

No transfer is valid, except between the parties, until it is recorded in the corporation's books, showing the parties, the date, the certificate numbers and the number of shares (Section 62, RCC). Until then, the corporation may keep dealing with the seller as its stockholder.

What should you check before you sign?

Transfer restrictions. Check the articles of incorporation, bylaws, certificate and any shareholders' agreement for a right of first refusal or a consent requirement. A right of first refusal in a shareholders' agreement binds the stockholders who signed it (Article 1159, Civil Code).
Close corporations. A close corporation's articles cap the holders of record at a stated number of not more than 20, restrict share transfers and bar public offerings (Section 95, RCC). Its restrictions must appear in the articles, the bylaws and the certificate, or they do not bind a purchaser in good faith. They may be no more onerous than an option for the existing stockholders or the corporation to buy the shares on stated reasonable terms; if the option lapses, the stockholder may sell to any third person (Section 97, RCC). The corporation may refuse to register a transfer that breaches a restriction the buyer had notice of, and notice is presumed if the restriction is shown on the certificate (Section 98, RCC).
Unpaid subscriptions. No certificate is issued until the subscription, with any interest and expenses on delinquent shares, is fully paid (Section 63, RCC), and shares on which the corporation holds an unpaid claim cannot be transferred in its books (Section 62, RCC).
Nationality limits. Before selling to a foreigner, check the 40% foreign ownership rule and the capital floors.

What documents do you need to transfer shares?

a notarized deed of sale, assignment or donation identifying the shares, the certificate numbers and the price;
the original stock certificate, endorsed by the registered owner or an authorized attorney-in-fact (Section 62, RCC);
for a corporate seller or buyer, a board resolution and secretary's certificate, since the board exercises the corporate powers (Section 22, RCC);
waivers from anyone holding a right of first refusal;
the corporation's latest audited financial statements; and
the filed tax returns, proof of payment and, finally, the eCAR.

The deed does not itself transfer the shares, but documentary stamp tax applies to agreements and memoranda of sale (Section 175, National Internal Revenue Code (NIRC)), and the BIR computes the taxes and issues the eCAR from the transaction documents.

What taxes apply when you sell unlisted shares?

Capital gains tax. A final tax of 15% applies to the net capital gains from selling shares that are not sold through a local or foreign stock exchange. The rate is the same for citizens and resident aliens (Section 24(B)(3), NIRC), nonresident aliens (Sections 25(A)(1) and 25(B)), domestic and resident foreign corporations (Sections 27(D)(4) and 28(A)(1)) and nonresident foreign corporations (Section 28(B)(5)(c)), all as amended by RA No. 12214 and subject to any applicable tax treaty.

The gain is the money plus the fair market value of any property received, less the seller's basis (Section 40(A), NIRC). The basis is cost for purchased shares, fair market value at acquisition for inherited shares, and the donor's basis for donated shares (Section 40(B)).

Returns. File BIR Form No. 1707 and pay within 30 days after each sale. Each year, also file the consolidated BIR Form No. 1707-A: by April 15 for individuals, or by the 15th day of the fourth month after the taxable year ends for corporations (Sections 51(C)(2)(a), 52(D) and 56(A)(3), NIRC, as amended by RA No. 12214; RMC No. 119-2021). Late filing or payment adds a 25% surcharge, or 10% for micro and small taxpayers, plus interest (Sections 248 and 249, NIRC, as amended by RA No. 11976).

What did CMEPA (RA No. 12214) change for unlisted shares?

The Capital Markets Efficiency Promotion Act (CMEPA), RA No. 12214, took effect on July 1, 2025. For unlisted shares, it:

applies one 15% rate to all sellers, resident or not, individual or corporate (Sections 24(B)(3), 25, 27(D)(4) and 28, NIRC);
extends the tax to unlisted shares of foreign corporations sold by resident citizens and domestic corporations (Sections 24(B)(3) and 27(D)(4));
excludes from the 15% tax shares sold through a local or a foreign stock exchange; sales through the local exchange pay stock transaction tax instead (Sections 24(B)(3) and 127);
keeps the 30-day return and the annual consolidated return (Sections 51(C)(2)(a) and 52(D)); and
moves the rule for individuals from Section 24(C) to Section 24(B)(3).

CMEPA did not amend Section 175, so the DST on share transfers is unchanged. It did cut the DST that a corporation pays on the original issue of its shares to 0.75% of par value (Section 174, NIRC, as amended by RA No. 12214; RR No. 19-2025). See our CMEPA overview.

How much is the documentary stamp tax on a transfer of shares?

DST is ₱1.50 on each ₱200, or fraction of ₱200, of the par value of the shares transferred (Section 175, NIRC, as amended by RA No. 10963). It is based on par value, not price: shares with a total par value of ₱1,000,000 carry DST of ₱7,500, whatever they sell for.

One tax per transfer, whether or not a certificate is issued, endorsed or delivered (Section 175).
No-par shares: 50% of the DST paid on their original issue (Section 175).
Gifts: Section 175 covers every sale, agreement to sell, delivery or transfer of shares, so donations are covered too.
Who pays: the person making, signing, issuing, accepting or transferring the document (Section 173, NIRC), though the parties may agree who bears it (RR No. 9-2000).
When: file BIR Form No. 2000-OT and pay within five days after the close of the month in which the deed was made, signed or transferred (Section 200(B), NIRC; RR No. 6-2001).
If unpaid: until the stamps are affixed and cancelled, the deed cannot be recorded, and neither it nor any copy may be used as evidence in court (Section 201, NIRC).

See our documentary stamp tax guide.

When is donor's tax due on shares?

A gift of shares is subject to donor's tax of 6% of the total gifts made in a calendar year in excess of ₱250,000 (Section 99(A), NIRC, as amended by RA No. 10963). The return and payment are due within 30 days after the gift (Section 103(B), NIRC, as amended by RA No. 11976).

A sale below value is partly a gift: the amount by which the shares' fair market value exceeds the price is deemed a gift (Section 100, NIRC). A sale made in the ordinary course of business, meaning one that is bona fide, at arm's length and free from any donative intent, is considered made for an adequate and full consideration (Section 100).

The BIR values unlisted common shares at their book value in the latest audited financial statements available before the sale, no older than those of the immediately preceding taxable year. Preferred shares are valued at liquidation value, including any premium and cumulative dividends in arrears, and appraisal surplus not in the financial statements is not added (RR No. 6-2013, as amended by RR No. 20-2020). A price below book value therefore invites a deemed-gift assessment unless the ordinary-course rule applies.

Can the corporation record the transfer without the BIR eCAR?

No. The BIR's regulations bar registering a transfer in the corporation's books unless the receipts of payment of the tax are filed with and recorded by the stock transfer agent or corporate secretary (Section 11, RR No. 6-2008). The BIR has clarified that a certificate authorizing registration is necessary to transfer ownership of shares not traded on the stock exchange (RMC No. 37-2012).

For gifts and inheritances, the Tax Code itself bars transferring shares to a new owner in the corporation's books without the BIR's certification that the taxes due have been paid (Section 97, NIRC).

Can the corporate secretary refuse to record a transfer?

Only for a lawful reason. The duties of the corporation and its secretary to transfer stock are "purely ministerial," and a corporation that refuses without good cause may be compelled by mandamus (Teng).

A buyer whose transfer is not yet recorded is a real party in interest who may sue for mandamus, and the secretary "does not try to decide the question of ownership." The buyer must still establish a clear legal right to registration (Andaya v. Rural Bank of Cabadbaran, Inc., G.R. No. 188769, August 3, 2016), so present complete papers.

Lawful reasons to refuse or wait include an unpaid claim on the shares (Section 62, RCC), a breach of a close corporation's restrictions that the buyer had notice of (Section 98, RCC), and missing proof of tax payment or the eCAR (Section 11, RR No. 6-2008; Section 97, NIRC). The corporation cannot require the buyer to surrender the old certificate before it records the transfer, but surrender is required before a new certificate is issued (Teng).

What must the corporation do after recording the transfer?

Update the stock and transfer book. It is kept at the principal office or at the office of the stock transfer agent, and records all stocks in the stockholders' names, alphabetically arranged, the installments paid and unpaid, and every transfer, with its date and parties. Directors and stockholders may inspect it at reasonable hours on business days. A stock transfer agent needs an SEC license, but a corporation may act as its own (Section 73, RCC). See corporate books and records.
Cancel and issue certificates. Cancel the surrendered certificate (Teng). The new one is signed by the president or vice president, countersigned by the secretary or assistant secretary and sealed with the corporate seal (Section 62, RCC), and is issued only for fully paid shares (Section 63, RCC).
File an amended GIS within seven days if the stockholders listed in the General Information Sheet change (General Instructions, 2026 GIS form). A share transfer takes effect against the corporation when it is recorded (Section 62, RCC). See our amended GIS guide.
Update HARBOR within seven calendar days if the corporation's beneficial owners change (SEC Memorandum Circular No. 15, s. 2025). See our GIS 2026 and HARBOR guide.
Recheck foreign ownership. The corporate secretary should recheck nationality compliance after every transfer (Section 3, SEC Memorandum Circular No. 8, s. 2013).
Watch for conversion. If all the shares end up with one person, the corporation may apply to become a One Person Corporation (Section 131, RCC). An OPC that takes in a second stockholder notifies the SEC within 60 days (Section 132, RCC). See OPC vs regular corporation.

How does a transfer of ownership of a corporation work?

Selling a corporation usually means selling its shares. The corporation remains the same juridical person (Section 2, RCC), with its own assets, contracts, registrations and liabilities, including any unpaid taxes. Only its owners change, so buyers review its books and tax filings before signing.

After a change in control, the stockholders usually elect new directors (Section 23, RCC), who elect the officers (Section 24, RCC). Report a departing director or officer to the SEC in writing within seven days from knowledge of it (Section 25, RCC), and file an amended GIS within seven days (General Instructions, 2026 GIS form).

How do you change shareholders in a corporation?

Transfer existing shares. A stockholder sells, assigns or donates shares, as described above. The corporation receives no money.
Issue new shares from the unissued authorized capital stock, or after an increase in capital stock, which needs board approval, the approval of two-thirds of the outstanding capital stock and prior SEC approval (Section 37, RCC). Existing stockholders have a preemptive right to subscribe in proportion to their holdings unless the articles deny it, subject to exceptions (Section 38, RCC). See how to increase authorized capital stock.
Buy back shares, which the corporation may do only for a legitimate corporate purpose and only if it has unrestricted retained earnings (Section 40, RCC).

What about listed shares?

Shares sold through a local stock exchange are not subject to the 15% capital gains tax (Section 24(B)(3), NIRC). The seller pays a stock transaction tax of 1/10 of 1% of the gross selling price, which the broker collects and remits (Section 127, NIRC, as amended by RA No. 12214; RR No. 20-2025), and the sale is exempt from DST (Section 199(e), NIRC, as amended by RA No. 12214). A private sale of listed shares outside the exchange falls outside that exception, so the capital gains tax rules above apply.

What if a stock certificate is lost or destroyed?

The registered owner files with the corporation an affidavit in triplicate setting out, if possible, the circumstances of the loss. The corporation checks it against its books and publishes a notice once a week for three consecutive weeks, at the owner's expense. If no one contests the claim within one year from the last publication, the corporation cancels the lost certificate and issues a new one, or earlier if the owner posts a bond. A pending contest or court action suspends issuance (Section 72, RCC).

Frequently asked questions

Do we need SEC approval to transfer shares?

No. A transfer becomes valid against the corporation once it is recorded in the corporation's books (Section 62, RCC). The SEC learns of it through the amended GIS and any HARBOR update.

Is a notarized deed of sale required?

The Code requires delivery of the endorsed certificate, not a deed (Section 62, RCC). Use a notarized deed anyway, because DST attaches to it (Section 175, NIRC) and the BIR works from it when it issues the eCAR.

Can I transfer shares I have not fully paid for?

No certificate is issued until the subscription is fully paid (Section 63, RCC), and shares on which the corporation holds an unpaid claim cannot be transferred in its books (Section 62, RCC). Settle the balance first.

When are the taxes due on a sale?

Capital gains tax within 30 days after the sale (Sections 51(C)(2)(a) and 52(D), NIRC). DST within five days after the close of the month of the sale (Section 200(B), NIRC). Donor's tax, if any, within 30 days after the gift (Section 103(B), NIRC).

Can we sell shares below book value?

Yes, but the BIR may treat the difference between the book value and the price as a gift subject to donor's tax, unless the sale is bona fide, at arm's length and free from donative intent (Section 100, NIRC; RR No. 6-2013, as amended by RR No. 20-2020).

How are inherited shares transferred?

The estate tax comes first. The corporation may record the transfer to the heirs only after the BIR certifies that the tax has been paid (Section 97, NIRC). For a later sale, the heirs' basis is the fair market value as of the date of acquisition (Section 40(B), NIRC).

Sources

Republic Act No. 11232 (Revised Corporation Code), Sections 2, 22, 23, 24, 25, 37, 38, 40, 62, 63, 72, 73, 95, 97, 98, 131 and 132
National Internal Revenue Code of 1997, Sections 24(B)(3), 25(A)(1), 25(B), 27(D)(4), 28(A)(1), 28(B)(5)(c), 40, 51(C)(2), 52(D), 56(A)(3), 97, 99(A), 100, 103(B), 127, 173, 174, 175, 199, 200(B), 201, 248 and 249
Republic Act No. 12214 (Capital Markets Efficiency Promotion Act), approved May 29, 2025, effective July 1, 2025
Republic Act No. 10963 (TRAIN Law) and Republic Act No. 11976 (Ease of Paying Taxes Act)
Revenue Regulations No. 9-2000, No. 6-2001, No. 6-2008 (Section 11), No. 6-2013 as amended by No. 20-2020, No. 19-2025 and No. 20-2025
Revenue Memorandum Circular No. 37-2012 and No. 119-2021
SEC Memorandum Circular No. 8, Series of 2013, and No. 15, Series of 2025
General Instructions, 2026 GIS form
Civil Code, Article 1159
Teng v. Securities and Exchange Commission, G.R. No. 184332, February 17, 2016
Andaya v. Rural Bank of Cabadbaran, Inc., G.R. No. 188769, August 3, 2016

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This article is general information as of its publication date, not legal advice, and does not create a lawyer-client relationship. For advice on your situation, consult a lawyer.