Share Transfer – Meaning of Share transfer and process for share transfer
October 12, 2022
Meaning of Share Transfer, Time Limit and Process for share Transfer
Table of Content
The transferability of a company’s shares is a crucial feature. Moveable property includes shares and debentures. They can be transferred in the ways specified by the company’s AOA. This article will give you useful insights on the Meaning of Share Transfer, the process for share transfer, and the time limits for Share Transfers.
Meaning of Share Transfer
Transfer of shares refers to the voluntary transfer of a business member’s rights and possibly their duties (as represented in a share of the company). The rights and obligations of the transfer of shares take place from a shareholder who chooses to no longer be a member of the firm to a person who seeks to join. In the absence of any specific restrictions under the company’s articles, shares in a company are therefore transferable like any other movable property.
Entities that are involved in the process for Share Transfer
- Legal Representator in the event of a death
- Subscribers to the memorandum
Documents required for Share Transfer
- Notice of Transfer by the Private Limited Company
- Offer letter from existing shareholders of the company
- Existing Shareholders’ Approval for the Transfer
- MOA and AOA of the Company
- Share Transfer Deed of the Company with Paid Stamp Duty and Additional Resolutions Relating to the Transfer of Shares
- Any other transfer related certificate (If needed)
Process for Share Transfer of a Private Limited Company
- Obtain a share transfer deed.
- Execute the share transfer deed, which has been signed by both the Transferor and the Transferee.
- Stamp the share transfer deed in accordance with the Indian Stamp Act and the State Stamp Duty Notification.
- Sign the share transfer deed with a witness’ signature, name, and address.
- Deliver the transfer deed and the share certificate or allotment letter to the Company.
- The documents must be processed by the company, and if approved, a new share certificate in the name of the transferee must be issued.
Time limit for share transfer certificate registration
Company having Share Capital: The transfer of a company’s securities or a member’s interest in the organisation other than the beneficial owners must be registered by the company without an appropriate instrument of transfer within 60 days of the execution date.
Application made solely by the transferor: Until the company promptly notifies the transferor and transferee of the application and both parties provide a no-objection certificate within two weeks of receiving the notice, the transfer will not be registered.
The company must issue certificates for all securities issued, transferred, or transmitted under the specified conditions and within the specified time frame. Below is the table of the time frame for any share transfer certificate registration:
Allotment of any Share
within two months after the date of allocation.
In case of Subscriber Memorandum
within two months of the company’s incorporation date.
The transfer document or notification of transmission must be received by the company
within one month of the date of receipt.
In case of Allotment of Debentures
After six months from the date of allocation.
FAQs on Share Transfer of a company
1. What would be the simplest approach to think about a company’s share transfer?
A resolution pertaining to the same must be taken into consideration for the simplest way to transfer shares in a company.
2. What type of document is utilized for the transfer of shares?
The form SH-4 is the document or instrument used for share transfers.
3. What is the penalty amount for not complying with Company Share Transfer compliances?
- For companies – the minimum and maximum amounts are INR 25,000 and INR 5,00,000.
- A law enforcement officer – The default amount is between INR 10,000 and INR 1,000,000.
Shares can be transferred when one person transfers ownership of them to another. It might be a current employee or someone from the outside. The Companies Act of 2013, Section 44 further states that shares are movable property that may be transferred subject to the AOA (Article of Association) of the company.
Share Transfer and Transmission
Shares can be transferred by executing share transfer deed. Complete all procedure seamlessly with EbizFiling.
Chandrashekhar Nimmalwar28 Oct 2020
(Translated by Google) Ebizfiling has a company providing support for time period service and proper guidance. It is my personal experience at present. Chandrashekhar Nimmalwar. Today Aas Family Foundation (Original) ईबिज फायलीग की सेवा समय अवधि कार्य प्रणाली एव उचित मार्गदर्शन के लिए सहायता प्रदान कम्पनी है।यह मेरा वर्तमान में नीजी अनुभव है। चन्द्रशेखर निममलवार। आज आस परिवार फाउंडेशन
Gaurav Sirohi04 Apr 2022
am very much satisfied with the services of Ebizfiling. They have completed registration of my private limited company in less than a week..they are very fast and very professional specially Vaishali ...I will recommend Ebizfiling to all who wants fast and reliable services
Hemang Malhotra08 Oct 2018
I was new as an Entrepreneur when I had seen their post on social media. I contacted them regarding proprietorship and realized they their pricing is incomparable in the market also their services are really prompt. Thank you, Ebizfiling.
October 20, 2022 By Zarana Mehta
Words that are restricted by MCA for a Company Name: All you need to Know There are many dos and don’t s while coming up with a company name. Keeping those in mind, a suitable name should be chosen because […]
October 19, 2022 By Zarana Mehta
8 most frequent reasons for company name rejection Introduction One of the crucial phases in registering a Private Limited Company is choosing the company name. When requesting names through the Ministry of Corporate Affairs’ RUN name approval process, an applicant […]
October 19, 2022 By Zarana Mehta
7 Tax Advantages of C Corporation in the USA Introduction Entrepreneurs may choose a C corporation for a number of advantages. This corporate structure can really assist business owners in reducing their overall tax burden, even though there is a […]