Transfer of Shares2023-03-14T22:53:05+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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    Transfer of Shares

    A company is owned and controlled by individuals or corporate bodies by holding shares in the company, who are collectively known as shareholders of the company. The shares are considered as units of ownership in a company and it can be transferred from one person to another like any movable property.

    Transfer of shares can be voluntarily done by the shareholders of company by transferring the title of shares from one party to another. The shares are transferred through a contract or arrangement between two or more persons. The shares of a Public Limited Company are freely transferrable whereas shares of a Private Limited Company are transferable subject to condition or restriction as specified in the Articles of Association (AOA) of company.

    Advantages of Transfer of Shares

    • Flexibility in Ownership

      Shares of a Company can be sold and purchased by promoters, shareholders and investors by way of transfer of shares. Share transfer process provides greater flexibility for changing the ownership percentage in a company.

    • Exit Opportunity

      There may be certain situations where few shareholders of the company, want to exit the company by selling whole or part of his share or the promoters/shareholders want to sell the company as a going concern, transfer of share provides an exit opportunity to the existing shareholder of company.

    • Succession Planning

      The shares of a company can be transferred from existing shareholder to a family member or legal heirs as a 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

    Procedure of Transfer of Shares

    • Collection of required Information and Documents

      In the first step, we shall collect the required information and documents as per the checklist. We shall verify and confirm the documents and information provided and then proceed towards next step.

    • Preparation of Share Transfer Documents

      Once we receive all the required information and documents, we shall then prepare the documents required for share transfer such as Share transfer deed (Form SH-04), Notices, Resolutions etc. on behalf of the applicant.

    • Execution of Share Transfer Documents

      The documents prepared for share transfer shall be duly signed by the transferor and transferee and then stamp duty shall be paid as per applicable stamp duty. The revised share certificates shall be provided to the new shareholders and their name shall be recorded in the Register of Members.

    Documents Required for Transfer of Share

    • 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 duly executed share transfer deed (Form SH-4) shall be delivered to the company within a period of 60 days from the date of execution by the respective party
    • If the Company has no objection, it shall record the share transfer and deliver the share certificates within 1 month from the date of request for transfer.
    • The Company may also refuse to register the transfer of shares on certain valid grounds within a period of 30 days from the date of request for share transfer. The concerned party can approach Tribunal against such refusal.
    • In case of any default in complying the provision of the law, the company and every officer of the company who is in default shall 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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