Share Transfer

The ownership of a Private Limited Company in India is decided by the shareholding of the company. To induct new investors or transfer ownership, the shares of the company need to be transferred. This allows the company to attract new investors or pass control.

Shares and debentures are movable property and are transferable as per the company’s articles. Share transfer is possible only through a contract or arrangement between two or more persons. The Companies Act deals with the transfer and transmission of securities.

Transmission of securities refers to the loss of title due to death, succession, inheritance, or bankruptcy.

Who is involved in Share transfer?

• Subscribers to the memorandum
• The legal representative in case of a deceased
• Transferor
• Transferee
• Company (Whether listed or unlisted)

Procedure to transfer the shares of Private Limited Company

• Obtain the share transfer deed in the prescribed format
• Deed to be signed by both transferor and transferee
• Stamp the deed with transferor’s name, address, and signature
• Attach allocation letter or transfer document to the share certificate and send to the company
• Company processes paperwork and issues new certificate if accepted
• Transferor requests the company to transfer shares
• Company sends notice to existing members about share transfer intention
• If no member shows interest, company will proceed accordingly