"Transfer of shares"

[punam rajak]

Hi All,

Can any one share the  procedure for transfer of  shares in private Limited Company.

only one Board Meeting is to be done and an can it be on the transfer date ?

Please reply

Thanks in advance

Thanks and Regards,

Punam Rajak, B.Com, M.Com, ACS

MOB:8697797773

[ACS suresh chaudhary]

Both Transferor and Transfree Resident Indian ?

[CS V Kartik]

Yes the date of Board meeting is the date of transfer.

As per Sec 56 read with Chapter 4 Rule 11 of Companies (Share Capital & Debentures) Rules 2014, after the board meeting is conducted, fill the details in Form SH-4, which has to be duly executed by both transferor & transferee. Pay stamp duty on both SH-4 & the share certificates & issue the share certificates to the transferee. Every instrument of transfer has to be delivered to the Company within 60 days from the date of execution.

[Umesh Vyas]

Dear Professional fees colleagues,.

There should be duly filled SH-4 logged to the company, then Company will place it before the Board.

On 29-Jun-2018 9:06 pm, "CS V Kartik" <karv...@gmail.com> wrote:

Yes the date of Board meeting is the date of transfer.

As per Sec 56 read with Chapter 4 Rule 11 of Companies (Share Capital & Debentures) Rules 2014, after the board meeting is conducted, fill the details in Form SH-4, which has to be duly executed by both transferor & transferee. Pay stamp duty on both SH-4 & the share certificates & issue the share certificates to the transferee. Every instrument of transfer has to be delivered to the Company within 60 days from the date of execution.

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[Ravi Hegde]

Dear Members,

When to pay stamp duty? before or after Board Meeting?

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Ravi Hedge
Cell 7760063100

[Umesh Vyas]

Share transfer form duly filled means completed in response to of everything including share  transfer stamp on it. Thenafter it is lodged before company. Company get it approved in board meeting.

[CS V Kartik]

Sorry there was a typo error from my side wherein the word “before” should have appeared instead of “after”. Sorry for the same.

[Ravi Hegde]

Dear Members

As per Act."The transfer of shares of a Pvt. Ltd. company is restricted". What is the meaning of restricted? 

On Sat, Jun 30, 2018 at 8:38 PM, CS V Kartik <karv...@gmail.com> wrote:

Sorry there was a typo error from my side wherein the word “before” should have appeared instead of “after”. Sorry for the same.

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[Tanvi Aggarwal]

it cannot freely transfer.

Regards

Tanvi- Aggarwal
9999629990

[Tanvi Aggarwal]

as per my view.

[Ravi Hegde]

As per your view. Its chargeable ?

[Tanvi Aggarwal]

its transferability is restricted because it is not freely transferable and there is no markebality also.

Shares of a private company cannot be just sold to any person on this Earth.

[Ravi Hegde]

Dear Madam,

What is the restriction?. I know its not freely transferable.

Any defined restriction is available?

[CS Neha Gupta]

Dear Sir

A Private Company is generally a closed group, wherein the shares are closely held amongst a limited number of persons. The restrictions, as stated are considered essential in a private company which is usually a group of trading persons bound together by close ties of friendship and/or relatives. These close associations cannot be established with anyone and everyone so easily and therefore, these members seek to keep the shares of such a company within the group. 

This motivates them to impose various restrictions to prevent the admission of members who may be unfavourable or hostile to the existing members and thereby to check the dilution of control over the company by the current members. These restrictions on transfer of shares help to keep the ‘soul and basis’ of the company intact. 

Further, the 2013 Act  is silent on the issue, several judgements have been rendered over the years in order to lay down the law regarding the type and extent of restrictions that can be placed in the AoA and for that you have to read judgements. But in general, restriction on transfer of shares in private companies mainly takes two forms: right of pre-emption in favour of other members and powers of the Board of Directors to refuse to register the transfer.

Right of pre-emption is basically that if a shareholder of a private company wishes to sell some shares, the existing shareholders have a right to be offered these shares first and on their refusal or failure to act within the given time, the shares can be sold to a third party. The motive behind this restriction is to prevent dilution of the promoter and other major shareholders’ stake in the company.

On Monday, July 2, 2018 at 4:58:05 PM UTC+5:30, ravi hegde wrote:

Dear Madam,

What is the restriction?. I know its not freely transferable.

Any defined restriction is available?

On Mon, Jul 2, 2018 at 4:52 PM, Tanvi Aggarwal <tanviagg...@gmail.com> wrote:

its transferability is restricted because it is not freely transferable and there is no markebality also.

Shares of a private company cannot be just sold to any person on this Earth.

On Mon, Jul 2, 2018 at 4:49 PM, Ravi Hegde <ravi...@gmail.com> wrote:

As per your view. Its chargeable ?

On Mon, Jul 2, 2018 at 3:52 PM, Tanvi Aggarwal <tanviagg...@gmail.com> wrote:

as per my view.

On Mon, Jul 2, 2018 at 3:52 PM, Tanvi Aggarwal <tanviagg...@gmail.com> wrote:

it cannot freely transfer.

On Mon, Jul 2, 2018 at 3:43 PM, Ravi Hegde <ravi...@gmail.com> wrote:

Dear Members

As per Act."The transfer of shares of a Pvt. Ltd. company is restricted". What is the meaning of restricted? 

On Sat, Jun 30, 2018 at 8:38 PM, CS V Kartik <karv...@gmail.com> wrote:

Sorry there was a typo error from my side wherein the word “before” should have appeared instead of “after”. Sorry for the same.

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Best Regards,
Ravi Hedge
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Regards

Tanvi- Aggarwal
9999629990

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Regards

Tanvi- Aggarwal
9999629990

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Regards

Tanvi- Aggarwal
9999629990

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[Ravindranath Tagore]

in a limited company or listed company, you can transfer to whom ever you want and there is no board approval required. but in case of private company, it has to be approved by the board and the board has every right to reject/disapprove the transfer. this is the restriction .

[punam rajak]

Yes both are in india only.

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[Govinda Patil]

Board approval is required  in case  shares are held in physical form  .   Only in case of demat shares  there is no board approval required.  DPs  make entries in the demat account

Further  also note that  in case of share transfers - there is no issue  of   new certificates.  Only tranferees  name is  mentioned in the memorandum of transfer   at the back of share certificate. Hence no stamp duty is payable

Even  in case of split certificate,  if new share certificate is to be issued  then also  no stamp duty as per value is payable.  Sufficient  if revenue stamp of Rs 1/- is affixed

As  far as  restriction of transfers- It is allowed only among existing members or relatives if provided in AOA. Otherwise as per pre emption, offered to existing shareholders, then allowed to be transferred to outsiders as the board  may decide. For this you need to follow  the procedure mentioned in AOA

as per my view.

it cannot freely transfer.

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Regards

Tanvi- Aggarwal
9999629990

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Regards

Tanvi- Aggarwal
9999629990

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Tanvi- Aggarwal
9999629990

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