Share Transfer

Share Transfer involves the voluntary handing over of the rights and possibly the duties of a company member to another person. In Private Limited Companies, shares are transferred through a written instrument (Form SH-4).

Process for Private Limited

1. Obtain transfer deed (Form SH-4) duly executed by transferor and transferee
2. Submit to company with share certificate
3. Board considers and approves transfer
4. If approved, register transfer and issue new certificate
5. If refused, give notice of refusal with reasons within 60 days

Stamp Duty

• 0.25% of share value (previously 0.25% of market value or consideration, whichever is higher)
• Stamp duty on transfer of debentures: 0.0001%
• Electronic transfer of shares: NIL stamp duty

Restrictions in Private Companies

• Articles may restrict right to transfer
• Right of first refusal to existing shareholders
• Board may refuse transfer with reasons
• Must intimate ROC if transfer changes beneficial ownership

Time Limits

• Transfer deed must be delivered to company within 60 days of execution
• Company must register transfer within 60 days of receipt (if no refusal)
• If refusing, must give notice within 60 days with reasons