Share Transfer is the process of transferring ownership of shares from one person (transferor) to another (transferee). It is a common way for shareholders to sell or gift their shares in a company.
Transfer of Shares in Private Limited Company (usually restricted by the Articles of Association)
Transfer of Shares in Public Limited Company (generally free, subject to compliance)
Transmission of Shares (transfer on death or insolvency of shareholder)
| Step | Description |
|---|---|
| 1. Execution of Share Transfer Deed | Transferor and transferee sign the share transfer form (usually Form SH-4). |
| 2. Board Approval | Board of Directors approves the transfer (especially in private companies). |
| 3. Payment of Stamp Duty | Stamp duty paid on the transfer deed as per state laws (typically 0.25% of share value). |
| 4. Updating Register of Members | Company updates its Register of Members with new shareholder details. |
| 5. Issuance of New Share Certificate | New certificate issued to transferee, old certificate cancelled. |
Duly signed Share Transfer Deed (Form SH-4)
Original Share Certificate
Board Resolution approving the transfer (if applicable)
Proof of payment of Stamp Duty
Transferor and transferee’s identification proofs
Transfer restrictions may exist in the company’s Articles of Association.
Timely updating of the Register of Members is critical.
Failure to record share transfer can lead to disputes.
Public companies follow stock exchange regulations for listed shares.
