Transfer of shares

As per Companies Act, 2013 “share” means a share within the share capital of a corporation and includes stock. A share is an indivisible unit of capital, expressing the ownership relationship between the corporate and therefore the shareholder. The denominated value of a share is its face value, and therefore the total of the face value of issued shares represent the capital of a corporation , which cannot reflect the market price of these shares.

Overview

The registered office of the corporate determines the company’s domicile. ROC is decided by the situation of the registered office. Any alteration concerning the address of the registered office should be told to the ROC (Registrar of Company).

What is the method to transfer shares?

The following is that the process to transfer the Shares step wise: –

Meeting between transferor and transferee for transfer of shares.
Execution of Share transfer deed in SH-4 (Format attached) duly executed, signed and stamped by transferor and transferee as per Law.
Either transferee or transferor will send share transfer deed along side original certificates or letter of allotment of securities (if no certificate is given to shareholder) to the corporate at the registered office just in case “> just in case of unlisted Company and to Registrar of Companies (RTA) in case of listed company within a period of sixty days from the date of execution.

The Company within a period of 1 month from the date of receipt by the corporate of the instrument of transfer shall register the transfer and issue the new share certificate to transferee.
The Company will update its register of members accordingly.

What is transfer of shares?

A share transfer is that the process of transferring existing shares, its related rights and liabilities from one person to a different .

A transfer of share can only be transferred for less than existing shares and from existing shareholders. Though the transferee are often existing shareholder or not of company.

Persons involved in Share Transfer

Subscribers to the memorandum.
Legal Representative, in case of a deceased.
Transferor.
Transferee.
Company (whether listed/ unlisted).

Documents Checklist

The following documents are going to be required to offer effect for transfer of shares:-

1. Original share certificate(s) of transferor

2. Self-attested copy of PAN card of Transferor(s) (i.e. sellers) and Transferee(s) (i.e. buyers)

3. Pay appropriate stamp tax @0.25% on market price by way of franking or affix share transfer stamps.

4. Form SH-4 duly filled and signed.

PROCEDURE FOR APPOINTMENT OF DIRECTOR

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Packages

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Basic	Standard	Premium
Transfer of share	Transfer of shares	Transfer of shares
	Share certificate Book 25 Copies	Share certificate Book 25 Copies
		Digital signature certificate (DSC)

Rs.1,500/-	Rs. 3,500/-	Rs. 5,500/-

Process

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3. Our Executive will get in touch with you and verify the details.

4. Filing the Application to concern department

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FAQ

1. what's stamp tax on transfer of shares?

Ans: stamp tax on transfer of shares depends from state to state

2. the way to determine the valuation of shares to affix stamps on the transfer deed happens?

Ans: within the case of listed companies, it’s very easy to seek out out the worth of the shares from the stock exchanges. However, just in case of personal companies, the worth of the shares are difficult to get , in such cases, the worth of the shares to work out the stamp tax , are going to be taken supported the typical market price of the shares at the time of transfer or the agreed price between the vendor and therefore the buyer, whichever is higher. However, generally, the Articles of a personal company might contain provisions which give that the shares must be sold at a good price determined by the administrators or the company’s auditors.

3. What are the steps to transfer Shares of a personal Limited Company?

Ans: Following are the steps to be followed while transferring shares of a personal Limited Company:

Step 1: Obtain the share transfer deed within the prescribed format.
Step 2: The share transfer deed must be executed duly signed by the Transferor and Transferee.
Step 3: Stamp the share transfer deed as per the Indian Stamp Act and stamp tax Notification effective within the State.
Step 4: Must have a witness sign the share transfer deed with his/her signature, name and address.
Step 5: The share certificate/ Allotment letter must be attached with the transfer deed and deliver an equivalent to the corporate .
Step 6: the corporate must process the documents and if approved, issue new share certificate within the name of the transferee.

4. what's the applicable stamp tax on transfer of shares?

Ans: Companies Act, 2013 requires that where share transfer form is delivered to the Board it should be duly stamped, with adequate value, and dated and cancelled as per section12 of the Indian Stamp Act . Generally, the transferee is liable for the payment of the stamp tax .

Being the transfer of Shares are subject to the central stamp tax , accordingly, as per the supply of Article 62 (a), Schedule I of Indian Stamp Act , 1899, the transferee is required to pay stamp tax at the speed of Rs 0.25 for each Rs 100 of the worth of the share. Special adhesive stamps bearing the word “share transfer” shall be used for stamping for share transfers.

5. can we got to pay stamp tax on transfer of shares as Gift?

Ans : Yes

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