Procedure For Transfer of Shares in Public Company

     

Procedure For Transfer of Shares in Public Company

    1.  Get the Share Transfer Deed in prescribed Form i.e SH-4, duly executed both by the transferor and transferee.

     2. The instrument of transfer may not be in the prescribed form in the following cases:-

      i.   Shares transferred by a director or nominee on behalf of another body corporate under section 187 of the companies Act, 2013;

      ii. Shares transferred by a director or nominee on behalf of a corporation owned or controlled by the central or state Government;

   iii. Shares transferred by way of deposit as a security as a security for repayment of any loan or advance if they are made with any of the following:-

(a)  State Bank of India; or

(b)  Any scheduled bank; or

(c)  Any other banking company; or

(d)  Financial Institution; or

(e)  Central Government; or

(f)  State Government; or

(g)  Any corporation owned or controlled by the Central or State Government; or

(h)  Trustees who have filed the declarations.

3.   For transferring debentures, the instrument of transfer need not be in prescribed form but standard format can be used, being convenient to do so.

4. Get the transfer deed duly executed either by the transferor and the transferee or on their behalf in accordance with section 56 of the Companies Act,  2013 and the Articles of Association, in case of shares, and also in accordance with trust deed in the case of debentures. Requirement of execution of the transfer form by each of the joint shareholders cannot be met by execution of the transfer form by one of the shareholders even though between the shareholders inter se there is an agreement that one shareholder can sign on behalf of all other shareholders.

5. The transfer deed should bear stamps according to Indian Stamp Act and stamp duty notification in force in the state concerned. The present rate of transfer of shares is 25 paise for every one hundred rupees of the value of share or part thereof.

6.  See that stamp affixed on the transfer deed is cancelled at the time or before signing of the transfer deed.

7.   The signatures of the transferor and the transferee in the share/debentures transfer deed must be witnessed by a person giving his signature, name and address.

8.   Attach the relevant share or debenture certificate or allotment letter with the transfer deed and deliver the same to the company. The share transfer deed and deliver the same to the company. The share transfer deed should be deposited with the company within the time limits.

9.   Where the application is made by the transferor and relates to partly paid shares, the company has to give due notice in Form No. SH-5 of the amount due on shares/debentures to the transferee and the transferee shall raise objections, if any within two weeks from the date of receipt of the said notice.

10. If within two weeks from the receipt of notice, ‘No objection’ is not received by the company from the transferee, than the company will not register the transfer.

11. If signed transfer deed has been lost, affix the same stamp on a written application. In such case, the Board may, if it thinks fit to do so, register the transfer on such terms of indemnity as it thinks fit.

12. In the next scheduled board meeting, the board resolution shall be passed regarding the transfer and transmission of shares.

13. On approval by the board, endorsement shall be made in the name of the transferee on the back side of the share certificate while in case where the company needs to split its shares into two or more new share certificates, endorsement shall be made in the name of the transferee in new share certificate and original share certificates shall be retained by the company itself and shall be marked cancelled on the face of the certificate.

14. The Share Certificates shall be delivered within a period of one month from the date of receipt of instrument of transfer.

Related Post :

Draft Board Resolution for Transfer of Shares

Key Provisions Relating to Transfer of Shares

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