Company Formation Specialists

Form 42 was introduced in the 2003 Finance Act. Form 42 is an Inland Revenue requirement and is simply a report of any transfer or issue of shares. Complying with the requirements of Form 42 is a legal duty. Form 42 once complete needs to be filed with the Inland Revenue within 3 months of the end of the tax year (april to april). Failure to do so may result in fines of up to £300 per company and £60 per day for late filing.

Click Here To Access Form 42

The form 42 is however no longer required where the following conditions apply:

• Shares are acquired directly upon incorporation
• Shares are transferred from a formation agent (e.g. Hanover Company Services)
• Shares are transferred from another person forming the company (e.g. solicitor or accountant)
• All the initial subscriber shares (and no form of security other than shares), are acquired at nominal value and
• The shares are acquired by a person who is a director or prospective director of the company, or by someone who has a personal family relationship with the director and the right or opportunity is made available in the normal course of the domestic, family or personal relationship of that person.

Where a company has transactions in its shares or securities in addition to the acquisition of initial subscriber shares a report of those additional transactions still has to be made on the Form 42.

Please refer to the Inland Revenue website www.hmrc.gov.uk/shareschemes or telephone 0207 147 2840 for further details as to whether you must file the Form 42.