Transfer of Shares in India Company, Know More Today and Relocate Your Assets Your Way!

Transfer of Shares in India Company

Did you know that shares in India are transferable? What is it, and what does it take to make a transfer? Transferring shares is fairly a simple process and you just need to know a few things before you can make it happen. Transferring shares is similar to transferring properties, in concept. People voluntarily transfer their shares for a variety of reasons, and it usually has a legal process you will have to follow through to make it official. Transfer of Shares in India Company, know more today and relocate your assets your way!


Share Transfer. What Is It?

To put simply, it is the handing over of rights, the title of shares or duties as a member of a company from one party to another. Usually, when you decide to transfer your shares, there will be a legal process and depending on the company you invested in, there may be restrictions. Transfer of Shares in India Company is governed by law, and as such, there are procedures to follow.


Who is Involved?

The following are a list of people or entities that are involved in the share transferring process:

  1. Subscribers to the memorandum.
  2. Legal representatives (in case of a deceased).
  3. Transferor.
  4. Transferee.
  5. Company (Listed/Unlisted).


What Are the Procedures?

The following is the general procedure based on Section 56 to 59 of the Companies Act, 2013(3) that you will have to undergo:


1. Duly Stamp the SH 4 Format

It is a form known as Form No. SH 4 which you will have to draft and produce this form based on the set template. Refer to your local authority for more information. This form details the transfer of shares with its value and date. It is executable on either the transferor or transferee’s behalf, but both need to sign.


2. Have Witnesses at the Ready

Aside from signatures from the transferor and transferee, you will also require two witnesses. These witnesses will affix their name, address and their signature.


3. Stamp the Deeds

Have the share transfer deeds stamped in accordance with the Indian Stamp Act. You will also need to pay a small fee.


4. Submit the Form to the Relevant Companies

You can submit the form from earlier to both the transferor and transferee’s company within 60 days of execution. You must also provide certificates of transfer or security certificates if you have any. If you have neither, you will need to send an application for share transfer as well as a letter of allotment of security.


5. Wait and Follow Through

Depending on which type of company you are involved in, the next step can be varied. Public company and private limited company have different further procedures and other sets of requirements. Reach out to your local authorities for more detailed and up-to-date information. Once you have done all the necessary paperwork, you will have to wait up to two months, depending on the procedures designated to you.


6. Transfer

Your share value or account will be transferred to your desired party. There will be security instructions for you to follow to finalise the process.


Additional Information

As a precaution, hiring a professional may be most prudent in helping you ensure that the transfer is done correctly and have lesser chances of being disputed or rejected. It is also important to note that there are penalties for specific procedures if you fail to complete certain actions at a given time frame.

Transfer of Shares in India Company