Transfer of shares

At G K B & Associates, we make sure your share transfer goes smoothly and correctly, handling everything legally and efficiently while working to avoid any disputes. We also ensure all the necessary official records stay up-to-date throughout the process.

Benefits of a Properly Managed Share Transfer

Legal Ownership Clarity – Ensures the new shareholder’s rights are recognized by law.

Dispute Prevention – Reduces chances of future legal conflicts.

Business Continuity – Smooth transfer without interrupting company operations.

Compliance with MCA – Avoids penalties for improper or unrecorded transfers.

Supports Strategic Goals – Allows mergers, acquisitions, or internal restructuring.

Documents Needed for Transfer of Share Capital

From the Transferor (Seller) & Transferee (Buyer):

1. Duly executed Form SH-4 (Share Transfer Deed)
2. Share certificates for the shares being transferred
3. PAN card & address proof of both parties
4. Passport-size photographs (if required)

From the Company:

1. Board Resolution approving the transfer
2. Updated Register of Members (before and after transfer)
3. Digital Signature Certificate (DSC) of an authorized signatory

Other Requirements:

1. Payment of applicable stamp duty on the transfer deed (varies by state)

Our Process

Reviewing the Articles of Association

We check the company’s AoA for any restrictions or conditions on share transfers and advise you on compliance requirements.

Getting the Paperwork Done

We prepare and execute Form SH-4, ensure stamp duty payment, and secure all required approvals from parties and the company.

Board Approval and Updating the Records

We arrange the Board Meeting for approval, cancel old share certificates, issue new ones, and update the Register of Members.

Restrictions

1. Private companies usually have restrictions under their AoA.
2. Pre-emptive rights may require offering shares first to existing shareholders.

Legal Basis

Governed by Section 56 of the Companies Act, 2013. The transfer must be recorded in the Register of Members within 30 days of receiving the transfer deed.

Timeframe: Typically 7–10 working days depending on approvals and document readiness.

Frequently Asked Questions

What does transfer of shares mean in a company?

Transfer of shares means voluntary passing of ownership rights in shares from one shareholder to another, in compliance with the Companies Act, 2013 and company’s Articles of Association (AOA).

When is transfer of shares required?

Share transfer is usually required in cases such as sale of shares, succession, gift of shares, change in ownership structure, or investor exit.

What is the procedure for transfer of shares in India?

The process includes:

Obtaining a share transfer deed (Form SH-4)
Paying applicable stamp duty
Submitting the deed along with share certificates to the company
Approval by the Board of Directors

What documents are required for transfer of shares?

Key documents include:

Duly executed share transfer deed (SH-4)
Original share certificate
Proof of identity/address of transferor and transferee
Board resolution approving the transfer

Can shares of a private limited company be freely transferred?

No. In a private limited company, transfer of shares is usually restricted by the Articles of Association (AOA), which may require approval of the Board of Directors or existing shareholders before transferring shares.

Transfer of shares