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
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 ?
Endorsement on the Share Certificate
Duly Executed Share Transfer form / instrument
Revenue stamps Payment
Board Resolution for share transfer
Easy exit from the ownership of the Company
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. Equity Shares which are also known as owners capital
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 theBoard 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 ?
Income Tax PAN of both the transferee and the transferor
Passport size colour Photo of both the transferee and the transferor
Aadhaar Card or Electricity Bill or Passport or Driving License or Voter ID Card of both the transferee and the transferor
Original Share Certificates of the Transferor
What can be the reasons for the transfer of shares ?
Dilution of control over the affairs of the Company
As per the management agreement, if entered between the members of the Company
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.
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.