Share Transfer - Online Process
Securities of the company are freely transferable, but in the case of the private limited company, there are some restrictions on the transfer of shares as mentioned in their articles.
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Share Transfer Procedure
Share Transfer is the process of transferring the shares from one party to another party. If some form of transaction is related to the transfer of property from one person to another person, then this type of transaction is known as Transfer. Share transfers are governed under the provisions of Companies Act, 2013.
The shares and debentures are movable property, they are transferable as they are provided by the articles of company, specially the shares of any members of a public company.
- Company having share capital:
There must be proper instrument for transfer of shares of the company. This transfer must be carried out within 60 days from the date of execution.
- Application by transferor alone:
The transfer shall not be registered until the company gives notice to transferor and transferee gives no objection certificate within 2 weeks from receipt of the notice.
- A Company shall deliver the certificates based on requirements in the prescribed time- limits:
- In case of subscribers of memorandum: Within 2 months from date of incorporation.
- In case of allotment of any of it shares: within 2 months from the date of allotment.
- In case of allotment of debentures: within 6 months from the date of allotment.
For contravention of provision of section56 of Companies Act, 2013 company as well as officer in default liable for the penalty:
- For Company– Minimum fine is Rs. 25,000 and Maximum is Rs. 5,00,000;
- For Officer in default– Minimum fine is Rs. 10,000 and Maximum is Rs. 1,00,000.
- Notice by the transferor to the company.
- Board resolution for considering the notice by the transferor to the company.
- Letter of an offer made by the company to an existing shareholders.
- Dissent letter from existing shareholders.
- Share transfer deed in form SH-4 form along with stamp duty paid.
- Share certificates.
Board resolution for registering the transfer of shares.
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Basic Features to Read before starting private limited company
A private company is required to add the word “Private Limited” or “Pvt. Ltd.” to the end of its name. A private company should have at least two members and two directors. The private company has the right to issue debentures to any number of persons.
Features of Public Limited Company
MCA provides the facility for the incorporation of public limited companies. For incorporation, firstly apply for name through RUN (Reserve Unique Name) on the MCA portal. After the availability of name from ROC we should file incorporation form i.e. Spice 32, INC 33(for eMOA), INC 34(for eAOA), .