A share transfer is the process of transferring existing shares from one person to another. Shares or debentures are movable property. They are transferable in the manner provided by the articles of the company. A member of a company may transfer his ‘interest’ as per section 82 that allows for transfer of shares or other interest.
Any transfer of shares needs to be formally actioned by you as the director.
Before you transfer any shares, you need to confirm your current shareholdings. In case of transferring shares to the new shareholder you will also need to conform their identity like name, date of birth, address and relation with other shareholders.
A board agreement can approved to transfer the share. A board meeting should be held to review the stock transfer form and agree the transfer.
If you have agreed with your share structure you will need to issue new share certificates. BizDesk will be help you to get share certificate easily.
According stamp duty under Indian Stamp Act, 1899, A Company cannot register transfer of shares unless the instrument of transfer is duly stamped and is delivered to the company.
The following details are required.
Transfer deed:
Enter all relevant details completely
Stamp duty:
Affix share transfer stamps worth 0.5 per cent of the market value of the shares on the date of execution on the transfer deed. Cancel the stamps by drawing lines across them.
Mode of holding:
It’s good to have joint holding of shares, as it reduces hassles at the time of a sale. Even if one signature matches, companies effect a transfer.
Mode of sending:
Send all documents (share certificate, transfer deed and covering letter) by registered AD or courier. Keep the receipts safely.
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