Selling Shares
As with buying shares, selling shares requires the investor to enlist the help of a stock broker to act as a legal agent in the transaction process. You may choose to have your stock broker sell only on your express command or you may instead opt to let them monitor the progress of your investments and choose the right moment to sell on your behalf.
Ultimately the involvement your stock broker has in your trading transactions is up to you, however any advice the broker gives you or any portfolio monitoring undertaken will increase the commission costs you pay. If, for instance, you opt to have your broker act as a discretionary dealer for you (giving them permission to buy and sell your shares at will), you will pay much more for their services. In general, regardless of how involved your broker is in your investments, you will still have to pay a commission for any work they undertake for you.
Preparing To Sell
When you decide to sell your shares (whether in whole or in part), there are a few requirements you must meet before the transaction can take place. You normally would need to have the updated share certificate in your possession before the sale of the shares can take place. The share certificate is the official document that is registered by the company that you own the shares in and details your purchase (the number of shares you own, when you purchased them, and so forth).
Because sales may happen very soon after purchase, especially if the broker is acting on your behalf as a portfolio manager, many brokers will allow the sale to go through regardless of whether you have the share certificate in your possession, though this is not always guaranteed. Check with your broker before you begin any transactions so that you know whether they will be happy to carry out transactions in this manner.
Completing A Sale
Once a transaction has been agreed to a contract note will be drawn up. The broker will oversee the process, but it will be necessary for you to confirm the details of the transaction on the contract note and to sign a share transfer form (generally the stockbroker will complete this form on your behalf). The contract note is an important financial document that you must retain for taxation purposes for a minimum of seven years.
The transfer form and share certificate, however, will be sent by your broker to the buyer and they will complete the transfer from their end. Note that the buyer pays the stamp duty. Payment for the shares purchased will generally be forwarded to you by your broker after the transaction has been completed and finalised.