Transfer of shares less then face value

[mann vishwakarma]

Dear Members,

Mr. A, the shareholders of XYZ ltd, can transfer his shares to Mr. B at less then face value??? I mean to say whether shares at face value of Rs. 10/- can be transfer at Re.1/-. Kindly reply.

[VIKAS GUPTA]

Hello Mann,

 

You can transfer the shares on any consideration but if you transfer to other person less than its book value then the remaining amount will be taxable in the hands of transferee as per Income tax Act...

 

On Mon, May 14, 2012 at 2:36 PM, mann vishwakarma <cs.ma...@gmail.com> wrote:

Dear Members,

Mr. A, the shareholders of XYZ ltd, can transfer his shares to Mr. B at less then face value??? I mean to say whether shares at face value of Rs. 10/- can be transfer at Re.1/-. Kindly reply.

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THANKYOU
CS VIKAS GUPTA
Assistant Company Secretary
Havells India Limited
9953620278
http://www.vikas1052.blogspot.com/

[yoganand l]

the consideration would depend on the intrinsic value of the share /
such amount as you feel like paying the other person.

if it is done intentionally to avoid tax, then the regulator might
take out the facts and ask you to pay the additional tax evaded.


regards,
yogan

[naresh kumar]

Dear Mr. Vikas, actually I am not confirm but I have heard that a provision has been made last year and according to this the shares cant transfer less than its face value.

 

Do you have any idea of this ?? because I have a same query also.

--Thanks & Regards--

Naresh Kumar
M.COM., ACS, LL.B.

MOBILE- 9910683177, 9990892282

 

 

Please consider the environment before printing this e-mail

[VIKAS GUPTA]

Hello Naresh,

 

Please refer section 56 of Income Tax Act.. This is wider section..

[mann vishwakarma]

Dear Vikas,

Thanks for prompt reply but some senior CS saying that Shares can not be transfer below face value.. You are requested, if possible, kindly let me know the relevant provision.

On Mon, May 14, 2012 at 2:38 PM, VIKAS GUPTA <vickyp...@gmail.com> wrote:

[VIKAS GUPTA]

In my opinion, it can be transfer less than face value.. You can take example from the market where the shares are traded at less than face value...

[nittin garg]

Yes there is no restriction to transfer of shares less then the face value of shares. But the market price is mandatory to consider. below that it cannot be done. --- On Mon, 5/14/12, VIKAS GUPTA <vickyp...@gmail.com> wrote:

[Sitaram]

Transfer can be done at below market price since it does not have any effect on the share capital of the company.ie. its between persons....income tax effect to be kept in mind.
Rgds
Sitaram

[kartheek CN]

Kindly check the Articles of Association in case of Private Company for any restrictions.

The there is no restriction in the Companies Act, 1956 BOD are authorized to transfer the share below face value.

C.N.Kartheek
karth...@gmail.com