What is share transfer?
A share transfer is the process of transferring existing shares, its related rights and liabilities from one person to another.
Who are the persons involved in share transfer?
These include subscribers to the memorandum, legal representative in case of a deceased, a transferor, a transferee and a company, whether listed or unlisted.
The documents include original share certificate(s) of transferor; self-attested copy of PAN card of Transferor/s and Transferee/s; payment of appropriate stamp duty @0.25 per cent on market value by way of franking or affix share transfer stamps and Form SH-4 duly filled and signed.
What is the process to transfer shares?
The process of share transfer includes a slew of steps. They are meeting between transferor and transferee for share transfer. Execution of share transfer deed in SH-4 signed and stamped by transferor and transferee. Then the transferee or transferor will send share transfer deed along with original certificates or letter of allotment of securities to the company at its registered office for unlisted companies and to Registrar of Companies in case of listed companies within sixty days from the date of execution.
The company within a period of one month from the date of receipt by the company of the instrument of transfer shall register the transfer and issue the new share certificate to transferee/
Can a company refuse to transfer the shares?
A company can refuse to transfer the shares in case all the documents are not furnished. Such intimation for refusal along with reason has to be intimated to transferor and transferee within thirty days from the receipt of share transfer deed.
What if transfer is not done as per provisions?
If a company fails to abide by law then the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.