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Transfer of Shares

he shareholders are the owners of a company limited by shares who are vested with wide powers of controlling the Company like appointment and removal of Directors, approval for bringing additional funds and the approval of related party transactions etc. Transfer of ownership of a company can therefore be affected by transferring the shares held by one member to another. Share transfer in a Private Limited Company is usually more restricted in compared to a Public Limited Company.

Transfer of ownership of a company can therefore be affected by transferring the shares held by one member to another. Share transfer in a Private Limited Company is usually more restricted in compared to a Public Limited Company. In case of Private Limited Company, the shares are closely held by either a small group of persons, family members or friends, etc. Hence, most of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider.

TRANSFER OF SHARES

 

 

BASIC INFORMATION

 

 

The shareholders are the owners of a company limited by shares who are vested with wide powers of controlling the Company like appointment and removal of Directors, approval for bringing additional funds and the approval of related party transactions etc. 

 

Transfer of ownership of a company can therefore be affected by transferring the shares held by one member to another. Share transfer in a Private Limited Company is usually more restricted in compared to a Public Limited Company. In case of Private Limited Company, the shares are closely held by either a small group of persons, family members or friends, etc. Hence, most of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider. Therefore, it is important to check the provisions of the Articles of Association of the Company prior to affecting a share transfer to understand additional compliances, if any.

 

 

What will you receive in Share Transfer package ?

 

 

  1. Endorsement on the Share Certificate
  2. Duly Executed Share Transfer form / instrument
  3. Revenue stamps Payment
  4. Board Resolution for share transfer
  5. Easy exit from the ownership of the Company
  6. Split facility for easy transfer while keeping your ownership intact.

 

 

 

What are the Types of shares are there in the Company ?

 

 

 

There are mainly two types of share capital in the Company:

  1. 1. Equity Shares which are also known as owners capital
  2. 2. Preference share capital which are based on preference of rights over the equity share holders.

 

 

What is the process for transfer of share in Company ?

 

 

Step 1: Fill up and execute the share transfer form in Form SH-4

Step 2: Pay the stamp duty on the form SH-4 by affixing the share transfer Stamps of 0.25% of the total consideration amount involved in the share transfer

Step 3: Deliver the SH-4 at the registered office of the Company

Step 4: Pass the Board Resolution for approval of share transfer

Step 5: Make necessary entries in the register of Members and register of share transfer

Step 6: Make necessary endorsement at the back of share certificate and handover the same to the transferee.

 

The entire process for registration of Company will take at least 2 to 4 working days.

 

 

What Documents are required for share transfer ?

 

  1. Income Tax PAN of both the transferee and the transferor
  2. Passport size colour Photo of both the transferee and the transferor
  3. Aadhaar Card or Electricity Bill or Passport or Driving License or Voter ID Card of both the transferee and the transferor
  4. Original Share Certificates of the Transferor

 

 

What can be the reasons for the transfer of shares ?

 

 

  1. Dilution of control over the affairs of the Company
  2. As per the management agreement, if entered between the members of the Company
  3. to part the total shareholding in favour of any person as business deal

 

 

How LeglaRaj will help with Share Transfer Process ?

 

 

understanding of requirements:

Our team will be conducting the review of the assignment and accordingly expert guidance will be provided with a professional approach towards the matter of transfer of shares interse or to the third party as the case may be.

 

 

Documentation

 

 

After going through your requirements we will prepare the documents relating to the share transfer and make necessary noting and entry in the statutory registers maintained by the Company.

 

 

Issuance of share certificates:

 

 

After all the formalities and processes are completed, our expert will arrange for issuance of share certificates duly endorsed on the back side to the transferee in 5 - 10 working days.

Documents


Income Tax PAN

Income Tax PAN of both transferee and transferor


Passport Photo

Passport Photo of both the transferee and transferor


Aadhaar Card

Voter ID Card of both the transferee and transferor


Share Certificates

Original Share Certificates of the Transferor

FAQ

Transfer of shares is a transaction resulting in a change of share ownership. A shareholder, whether in public or private company, has a property in his share which he has a right to dispose of, subject only to any express restriction which may be found in the Articles of Association of the Company.

Shareholder (transferor) proposes to transfer his shares to the existing members; Other members (proposed transferees) accept the offer; The Share Transfer Form(s) is executed between the transferor and the transferee; The Share Transfer Form(s) is stamped with the cancelled Share Transfer Stamps; Board of Directors in their meeting approves the Share Transfer Form executed alongwith the original Share Certificate(s); The amount of consideration is transferred by transferee into the account of transferor; Corresponding entry(ies) is to be made in the Register of Members and the Register of Share Transfer. The Share Transfer Process is completed.

No Hidden charges. Every detail regarding charges is transparent as you can see in the Quotation file in your mailbox.

Click on Get Quotation tab above and fill the details, you will receive required documents list and quotation in few seconds in your mailbox. No charges for requirement list and Quotation.

Transfer of Shares usually takes 1-2working days subject to the approval of the Central Govt. and the receipt of documents from the clients.

Yes. The Share Certificate of the transferors will be endorsed on the back side with the transfer details such as Folio No. of the transferee, no. of shares held and the signature of Company Officer, etc. will be handed over to the transferee to whom the shares have been transferred.