Transfer of Shares2023-08-09T23:13:38+05:30

Transfer of Shares

Transfer of shares is a voluntary process of transferring the ownership rights in a company from one person to another.

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    What is a Transfer of Shares?

    Individuals or corporate bodies own and control a company by holding shares, collectively known as shareholders. These shares represent units of ownership and are transferable from one person to another, much like any movable property.

    Shareholders voluntarily transfer shares by transferring the title from one party to another through a contract or arrangement involving two or more persons.

    While shares of a Public Limited Company are freely transferable, shares of a Private Limited Company are subject to conditions or restrictions specified in the Articles of Association (AOA) of the company.

    Advantages of Transfer of Shares

    • Flexibility in Ownership

      Promoters, shareholders, and investors can buy and sell shares of a company through the process of share transfer. This mechanism offers greater flexibility in changing the ownership percentage in the company.

    • Exit Opportunity

      In certain situations, some shareholders of the company may desire to exit by selling all or part of their shares, or the promoters/shareholders may wish to sell the entire company as a going concern. Share transfer offers an exit opportunity to the existing shareholders of the company.

    • Succession Planning

      Existing shareholders can transfer the shares of a company to a family member or legal heirs as part of succession planning.

    Minimum Requirements for Transfer of Shares

    • Company

    • Transferor

    • Transferee

    • Share certificate

    • Share transfer deed (Form SH-04)

    What is included in our Transfer of Shares package?

    • Consultation on Share transfer process

    • Verification of documents

    • Documentation of Share transfer such as Form SH-4, Board Resolution, Notice etc.

    • Share Certificates for shareholders

    Share Transfer Procedure under Companies Act 2013

    • Collection of required Information and Documents

      In the first step, we will collect the necessary information and documents according to the checklist. After verifying and confirming the provided documents and information, we will proceed to the next step.

    • Preparation of Share Transfer Documents

      Once we have received all the necessary information and documents, we will proceed to prepare the required documents for share transfer, including Share transfer deed (Form SH-04), Notices, Resolutions, etc., on behalf of the applicant.

    • Execution of Share Transfer Documents

      The transferor and transferee shall duly sign the documents prepared for share transfer, and then they shall pay the applicable stamp duty. Subsequently, the new shareholders will receive the revised share certificates, and their names will be recorded in the Register of Members.

    Documents Required for Transfer of Shares

    • Certificate of incorporation

    • Memorandum of Association (MOA) and Articles of Association (AOA) of Company

    • Existing Shareholders list or Copy of Shareholder Register

    • Share certificate of Transferring Shareholders along with Name, Identity proof, mobile number, email id and address proof (Transferor)

    • Name, Identity proof, mobile number, email id and address proof of the purchasing shareholder (Transferee)

    • Receipt of consideration paid

    • Any other documents as may be required

    Time Limit for Transfer of Shares

    • The respective party must deliver the duly executed share transfer deed (Form SH-4) to the company within 60 days from the date of execution.
    • If the company has no objection, it will record the share transfer and issue the share certificates within 1 month from the date of the transfer request.
    • However, the company reserves the right to refuse the transfer of shares on valid grounds within 30 days from the date of the transfer request. In such cases, the concerned party has the option to approach the Tribunal against the refusal.
    • In case of any non-compliance with the provisions of the law, both the company and every officer in default will be liable to a penalty of Rs. 50,000.


    When is the share transfer required in a company?2021-10-20T11:40:53+05:30

    The company may undergo share transfer process in cases when the shareholders want to change their shareholding pattern/structure, or when new investors or shareholders are inducted in the company.

    How much time is required for the share transfer process?2021-10-20T11:40:32+05:30

    The share transfer process takes approximately 7-8 days based on availability of the required documents and information.

    Can I transfer a certain portion of my shares i.e., partial transfer ?2021-10-20T11:40:05+05:30

    Yes, you can do partial transfer of shares.

    Is the physical presence of shareholder required during the process?2021-10-20T11:39:31+05:30

    The physical presence of shareholders may not be required during the process, however signature of transferring shareholders is required on the share transfer form.

    Can I transfer the shares to a Foreign or Non-resident shareholder?2021-10-20T11:39:09+05:30

    Yes, you can transfer the shares to a Foreign or Non-resident shareholder by complying with the FEMA Guidelines.

    Can a minor person become a shareholder of a Company?2021-10-20T11:38:22+05:30

    A minor can become a member/shareholder of a company only through gift and/or inheritance but he cannot enter into agreement to buy shares. Further, minor shall hold shares through his guardian and his guardian will act as a member on behalf of minor.

    Can I transfer shares to a Company / LLP / Body Corporate?2021-10-20T11:37:31+05:30

    Yes, you can transfer shares to any other Private Limited Company, Public Company, LLP, and Registered Society. However, Partnership firm cannot hold shares in any Company.

    Is there any stamp duty to be paid on the share transfer deed?2021-10-20T11:36:59+05:30

    Yes, stamp duty at the rate of 0.015% on the total value of consideration has to be paid on share transfer deed.

    Is there any stamp duty to be paid on the share certificates?2021-10-20T11:36:31+05:30

    Yes, stamp duty at the rate of 0.005% has to be paid on issue of share certificates.

    What is the difference between a director and a shareholder?2021-10-20T11:35:04+05:30

    A shareholder or member is an owner of a company who holds certain shares in the company and his name is entered in the register of members of the company. Whereas Director is a person who manages the day-to-day function of a business. Director and shareholder may or may not be the same person.

    Can I transfer the shares held in Demat Form?2021-10-20T11:31:05+05:30

    Yes, shares held in Dematerialised form can also be transferred to another person by following the due process as per law.

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