Step wise procedure for Transfer of Shares
Follow these procedures to begin the transfer of shares in a private limited company:
The transferor must notify the company of his intention to transfer shares in writing.
- The company should then inform other members of the availability of shares and the cost at which they may be purchased.
- Typically, the directors or auditors of the company determine this price based on the book value of the shares.
- The company should also advise members of the deadline for submitting their transfer option to acquire shares.
- If no member acquires shares, the company will be compelled to accept the transfer of the shares to an outsider.
- SHARE TRANSFER DEED IN SH-4
Obtain a fully executed form SH-4 share transfer deed signed by both the transferor and transferee. SH-4 should be
- Correctly stamped
- The transfer date
- Identification of the transferee and transferor's names, surnames, residences, and, if applicable, employment.
- The Folio Numbers of the Transferor and Transferee.
- Unique Number, Share Certificate Number of the transferred share.
- The nominal value of the shares, which includes any payment received.
- Executed by either the transferor or the transferee
- SHARE REGISTER AND CERTIFICATES
The company must maintain the share certificate, or in the absence of such a certificate, the letter of allocation together with the transfer paperwork.
- APPROVAL BY BOARD OF DIRECTOR:
After receiving the share transfer deed and all other papers, the company will evaluate the deed and documents and vote to accept them at a Board Meeting. Enter the transferee's name as the beneficial owner of such shares in the member's register of beneficial owners following the adoption of the Board resolution. If the transfer paperwork is in order, the board must approve a resolution to record the transfer.
- POWER DELEGATION TO SINGLE DIRECTOR:
The power to transfer shares may be delegated to a single director, who may serve as a "one-man committee." The Board may place limitations on the Committee's authority, such as limiting share transactions to a maximum of 1,000. The Board or a committee may also authorise transfers by circular resolution.
- TRANSFER OF SHARES CERTIFICATE:
Within one month after the acceptance of the Board Resolution, the Company will issue a share certificate in the name of the transferee. The Share Certificates will be affixed with the Transferee's name by the Company.
Documents required for Transfer of Shares
The following documents must be submitted to the company for the transfer of shares:
- The income tax PANs of both the transferee and the transferor
- Passport-sized photographs in colour of both the transferee and the transferor.
- Both the transferee and transferor are required to provide an Aadhaar card, an electricity bill, a passport, a driver's licence, or a voter identity card.
- The Original Share Certificates of the Transferor
4.8
4.5
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
