What actually has to happen before a private share transfer completes

A public trade settles because an exchange, a clearing house and a central depository have already agreed on how it will. None of that exists for shares in a private company. What exists instead is a chain of approvals, and a transfer completes only when every link holds.

The seven stages

1. Origination. Either the company sponsors a liquidity event, or a shareholder lists a holding they already own.
2. Offer and negotiation. A verified investor bids. Terms move until both sides accept, or nobody does.
3. Compliance review. Identity checks on both parties, anti-money-laundering screening, and confirmation that the buyer's accredited status is verified rather than merely claimed.
4. Issuer approval. Almost every private company's constitutional documents require the board to consent to a transfer. This is not a formality.
5. Right of first refusal. The company, or sometimes existing holders, may buy the shares on the agreed terms instead. The seller sells; the buyer does not buy.
6. Documentation. Transfer agreement, any required consents, and the paperwork the company's counsel asks for.
7. Settlement and registration. The register is updated. Until it is, the buyer does not own anything.

Why the order matters

Each stage exists to catch something the previous one could not. Running compliance after issuer approval would mean asking a board to consent to a transfer to somebody who turns out to be ineligible. Running the right of first refusal before terms are agreed would mean asking the company to match a price that does not exist yet.

Where it most often stops

Not at price. Most transfers that fail do so at stage four or five — the company declines the transfer, or exercises its right of first refusal. Both are normal outcomes, not failures of the process, and both are why a private holding is not a liquid asset even when somebody is willing to buy it.