Q&As

If a husband and wife hold shares in a company jointly, what happens on the death of one of them? Will the deceased's interest be extinguished so that the shares pass automatically to the surviving spouse without becoming part of the estate?

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Produced in partnership with Helen Galley of XXIV Old Buildings
Published on: 09 November 2016
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On the death of one joint owner the legal title to the Shares passes automatically to the remaining joint owner or owners rather than, as with any property held in the sole name of the deceased, into his estate. So assuming it is the husband who has died, then the widow will take the legal title in the shares by survivorship rather than under the terms of the deceased husband’s Will or on his Intestacy.

Joint owners of shares do not share the same Shareholders’ rights as pursuant to section 286 of the Companies Act 2006 (CA 2006) more rights are conferred on the first named joint shareholder than on the others. The

Helen Galley
Helen Galley

XXIV Old Buildings

Helen has built up a reputation as a well-respected commercial Chancery practitioner with an emphasis on property and trusts related issues. She has built up extensive and wide ranging expertise in both non contentious and contentious property matters ranging from small scale cases to multi-million pound developments. Helen has also acted in a wide range of commercial and business disputes in areas as diverse as travel, hire purchase, the media, entertainment, IPR, IT and e-commerce. Contentious and non-contentious trusts matters, both on and offshore, are a regular feature of her caseload. Helen is a member of STEP, ACTAPS, the Property Bar Association, the Chancery Bar Association and IAL as well as an accredited mediator. Helen is recommended as “a first-rate advocate” in Legal 500 2015 for private client (trusts and probate), partnership and professional negligence. She is said to be “consistently able to provide excellent advice in a charming and friendly style” and is “responsive, hugely supportive and extremely user-friendly”.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Shares definition
What does Shares mean?

The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.

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