Share Transfer
The ownership of a Private Limited Company in India is decided by the shareholding of the Company. For inducting new investors or transferring the ownership of the company the shares of the company need to be transferred. The company's interest could be sold to attract new investors or to pass the control of the company.
- Transfer of shares means handing the rights and possibly the duties of a company member voluntarily. The rights and the duties of the share transfer happen from the shareholder who is wishing to not be a member of the company anymore to a person who is willing to be a member of the company.
- Thus the shares in a company are transferable like any other movable property in the absence of the expressed restrictions under the Articles of the Company.
- Subscribers to the memorandum
- The legal representative in the case of a deceased
- Transferor
- Transferee
- Company (Whether listed or unlisted)
There are certain restrictions over the transfer of the shares of the Private lImited company the following procedure should be followed to transfer the shares:
- At first, it is necessary to obtain the share transfer deed as required in the prescribed format This deed needs to be duly signed by the transferor and the transferee.
- Stamp this transfer of share transfer deed with his or her name, address, and signature.
- The transfer document or the allocation letter is to be attached to the share certificate and sent to the company The company should process the paperwork and the transferor should be granted a new certificate in case if it is accepted.
- The transferor will request the company to transfer his shares.
- A notice will be sent by the company to all the existing members that the above-mentioned shareholder has shown the intention to transfer the shares.
- In case if no existing member has shown interest in the company then the company will intimate the transferor that he can sell his shares to a nonmember.