Shares transfered without consideration

[raju three]

Dear sir,

Can shares be transfered to any person without consideration as gift?

Is there any way transfer the shares of a private limited company  to any person without consideration.

Kindly let me know the provisons.

Regards

Raju

[Anju Grewal]

Hi Raju,

Shares can be gifted by a shareholder even though in the case of Private Companies, but the transfer should not be against the basic conditions to be followed by a private company like: maximum no. of members, etc. and it should not be prohibited by the Articles of the company.

P Please do not print this email unless it is absolutely necessary. Spread environmental awareness. 

Thanks & Regards

Anju Grewal

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[Anju Grewal]

In addition to that You need to get the gift deed registered as well.

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[Rajesh]

Dear Raju,

 

Yes. you can transfer the shares as a gift. But you have to pay the stamp duly on the value of the shares.

 

Regards

Rajesh

On Wed, Apr 6, 2011 at 11:50 AM, raju three <raju...@gmail.com> wrote:

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Thanks and Regards,
Rajesh R
Contact : 9886678285

[Dipak singh]

Dear Anju/Raju,

I am agree with your explanation, But my Question is What would be
Stamp value to be affixed on Share Transfer Deed at the same time
there is no Consideration by way of gift...??? Stamp Value should be
calculated on

a) Transferor Book Value.
b) Break up Value of Company Share at the time of Transfer.
c) Nominal Value of Share


Correct me if I am Wrong

Regards,

Dipak Singh

[raju three]

Dear all,

Thank u very much for valuable comments.

Regards

Raju

[Rajesh]

Dear Deepak,

 

In my view the stamp duty should be calculated on the value of the share at the time of transfer.

 

Regards

Rajesh

[raju three]

I think it should be calculated on face value.

Regards

Raju

[Anju Grewal]

Hi all,

Sorry I have never dealt with such situation before... so plz keep this discussion goin and help me to knw the correct answer for this.

[Rajesh]

Dear Deepak,

 

I have come across a situation where one member of the company transferred shares as a gift to his relative. But the shares are transferred without consideration. Stamp duty paid on the face value since the market value and the face value were same.

 

Thanks and Regards

Rajesh

[gaurav rathore]

Dear Deepak,

 

Stamp Duty will be calculated on the highest value.

Correct me if I am wrong.
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Thanks & Regards,

Gaurav G S Rathore
Mo-9807135830

[Dipak singh]

Dear Rajesh,

Now i Discuss a situation where transferor were Purchased shares of
PVT company at Rs 100 per share ( Rs 90 premium) now

a) Transferor Book Value is RS 100
b) Book Value of Company Shares is approx 79 at the time of transfer.
c) face value Rs .10

Now Suggest what would be the Consideration to calculate STAMP
duty....???? he gifted 50000 shares of that Company.

Regards,
Dipak Singh

[gaurav rathore]

Soory for the earlier reply.

 

According to me

 

The correct answer to in respect to the value of shares on which stamp duty :-

 

For Listed Companies- Market value prevailing on the date

 

In other cases- Face value of shares or Last transaction Amount i.e. consideration mentioned in the last transfer ( Whichever is higher)

 

Please, Correct me if i am wrong.

[Dipak singh]

Dear Gaurav,

Can you support your answer with any Act,section, circular, or
notification.

Regards,
Dipak Singh

[gaurav rathore]

Dear Deepak,

 

For the first one in case listed Companies answer is correct.( u can refer the websites of listed companies and check the FAQ related to investor)  http://www.hul.co.in/investorrelations/FAQsForms/

For the second i can't find out any case or act or circular.

 

I have given the answer on the basis of a similar discussion going in Lawyers Club India.

 

 

Sorry for any confusion caused by me.

[Dipak singh]

Dear Gaurav,

I am aware of 1st answer but i wanted to know for second one.

Regards,
Dipak Singh

[Rajesh]

Der Deepak,

 

This is the case on purchase of shares. The value of shares for stamping should be Rs.100/- including preminum. Here consideration is fixed.

 

Where as in the case of gift there is no question of consideration.  I hope it should be on the face value of shares. 

 

I request Members to throw light on this issue.

 

Regards

Rajesh 

 

 

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[SrikanthReddyKolli CS]

HAI,

Section 56(2) by the Finance (No.2) Act, 2009 says when the donor gifts shares for nil consideration the value shall be arrived to tax it in the hands of donee if they are not close relaives.

to arrive such value it has given the formula which is as followes: (Assets-Liabilities)* paidup value of such equity shares/paidup equity share capital as shown in the balance sheet.

according to this the value wil be higher and attracts high stamp duty

so go for book value for liberal compliance as in time of inspection if they question then you can pay the remaining

the same way i did

contrary views solicited