When the share is transferred from one individual to another in the form of sale or gift is referred to as share transferred. The rights and duties of the members are handed over voluntarily from a shareholder to another person in the condition of becoming the member and quitting the same. Shares are transferable under the rules and article of the company
Who are eligible and involved in the share transfer?
– Memorandum subscribers.
– In the case of the deceased, a legal related individual.
– The Company
The Process of Transferring of Shares under Companies Act 2013
– Form SH-4, The transfer deed must be obtained in the prescribed form provided by the authority. The transfer of shares cannot be made if a director transfers shares on behalf of another corporate under section 187 of Companies Act, 2013.
– The transfer of shares cannot be made if shares are transferred on behalf of a company owned by the central or state Government
– The transfer of shares cannot be made if shares are transferred in the form of deposit as security of loan with SBI or any financial institution
– A standard format needs to be used for the process of transferring debentures
– The transfer deed should have stamps according to the Indian Stamp Act. The Stamp duty rate is s Rs. 0.25 or 25 Paise for every Rs. 100 rupees as the value of the share.
– The transferor and transferee sign on the share transfer deed must be seen by the individual giving his/her signature, name and address as approval.
– The share certificate with the transfer deed must be attached and needs to be sent to the company.
– The company has to notify the amount pending on share to the transferee if the application is made by transferor
– The same value stamps should be affixed on the application if the loss of transfer deed.
– The company cannot charge any fees for transfer registration for a share if the company’s shares are listed by the stock exchange
There’s a time limitation to these processes which are as follows:
– Within the time frame of 2 months from the date of incorporation for memorandum subscribers
– Within the time frame of 2 months from allotment date for allotment of any shares of the company
– The company’s receipt of the process of transfer within 1 month.
– Debenture allotment within the time frame of 6 months from the allotment date.