Transfer of shares means a transfer of ownership of shares in whole or part from an existing holder to a new one either by adding a new shareholder or by changing the existing proportion of shares between shareholders. The entire process is internal which only gets recorded in minutes, and no further filing of the form with the ROC is required. Further, the transfer of the shares attracts stamp duty at the rate as prescribed in the Stamp Act for respective states and the payment can be borne either by the transferor or the transferee.
The shares transfer procedure is regulated by the articles of association of the company. The procedure for the same varies from a private limited company to a public limited company. In case of a company that is required to hold shares in physical form and the entire shares as mentioned on the certificate are being transferred to another person, then the name of the transferee is written at the back of the share certificate but if the part of shares are being transferred the old share certificate need to be canceled, and fresh share certificates with split in shares will be required to be executed.
Once the company receives a duly stamped, dated & executed instrument of share transfer i.e. SH-4 along with other relevant documents, it shall after verifying the documents properly, register the concerning transfer of shares within a period of one month of the receipt of the above-specified documents.
The process of transfer of shares is simple as it does not involve any filling of the form with the ROC. Online basic documentation and registration of the same with the company are enough.
The existing shares can be transferred from one person to another easily. The share transfer form or share transfer deed can be prepared easily. We at Provenience, ensure a seamless and hassle-free experience.
By shares transfer procedure, the ownership and title of the shares is transferred from one person to another. Thereby, the ownership and control lie in the hands of the shareholder, and the voting rights in the company are also transferred accordingly.
The liability of the shareholder is limited to the extent of the shares held by him or her. This secures the personal assets of the shareholders in case of loss incurred by the company.
Arrange to provide the details of the new member to whom the shares are required to be transferred as per the list of details and documents shared.
The Board shall issue share certificate in the name of the transferee after endorsing at the back of the share certificate & enter the details of the transferee in the register of members.
On the receipt of the proper share transfer documents, the company shall hold the Board meeting and take on record the transfer of shares.
Share transfer deed duly executed by the transferor & the transferee along with the original share certificate to be handed over to the company
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Bhanu is a person to count upon, with his expertise in his domain and knowledge he brings on you can reach him with a problem any time. His appetite to listen and understand the issue makes him the man for the job. He is proactive, energetic and a resourceful guy. My best wishes to Bhanu and Provenience for future endeavour.
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Transfer of shares means a transfer of ownership of shares in whole or part from an existing holder to a new one either by adding a new shareholder or by changing the existing proportion of shares between shareholders.
No, transfer of shares is an internal process which only gets recorded in minutes, and no further filing of the form with ROC is required.
No, it is not mandatory to transfer the shares only to the existing members instead transfer can be made to the third party also. However, in case of the Private Company, the shares are required to be first offered to the existing shareholders & once they refuse to accept, the shares can be transferred to any third person.
Yes, the transfer of shares attracts stamp duty at the rate as prescribed in stamp act for respective state and the payment can be born either by the transferor or the transferee.
In case of a company which is required to hold shares in physical form and the entire shares as mentioned on the certificate are being transferred to another person then the name of the transferee is written at the back of the share certificate.
In case of part of shares being transferred, the certificate needs to be cancelled, and fresh share certificates with split in shares will be required to be executed.
The Company shall register & issue the share certificate in the name of the transferee within one month of the receipt of the duly executed & stamped share transfer instrument along with the original certificate of the shares being transferred.
The seller and the buyer can negotiate the price if the shares are sold freely. The shareholder’s agreement or the company’s article of association may have specific details about the valuation of the shares.
The directors of the company have the obligation to act in the best interest of the shareholders. So, selling shares at lower price would not be acting in the best faith. However, under certain circumstances and as per Companies Act, shares can be transferred for amount less than their worth. Please get in touch with us for additional details.