Transfer of Shares


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Transfer of shares

As per Companies Act, 2013 “share” means a share within the share capital of a corporation and includes stock. A share is an indivisible unit of capital, expressing the ownership relationship between the corporate and therefore the shareholder. The denominated value of a share is its face value, and therefore the total of the face value of issued shares represent the capital of a corporation , which cannot reflect the market price of these shares.

What is transfer of shares?

A share transfer is that the process of transferring existing shares, its related rights and liabilities from one person to a different .A transfer of share can only be transferred for less than existing shares and from existing shareholders. Though the transferee are often existing shareholder or not of company.

Persons involved in Share Transfer

What is the method to transfer shares?

The following is that the process to transfer the Shares step wise:

Documents required.:


Rs. 1500/-

Transfer of share

Rs. 3500/-

Transfer of shares

Share certificate Book 25 Copies

Rs. 5500/-

Transfer of shares

Share certificate Book 25 Copies

Digital signature certificate (DSC)

Frequently Asked Question

Ans: stamp tax on transfer of shares depends from state to state

Ans: within the case of listed companies, it’s very easy to seek out out the worth of the shares from the stock exchanges. However, just in case of personal companies, the worth of the shares are difficult to get , in such cases, the worth of the shares to work out the stamp tax , are going to be taken supported the typical market price of the shares at the time of transfer or the agreed price between the vendor and therefore the buyer, whichever is higher. However, generally, the Articles of a personal company might contain provisions which give that the shares must be sold at a good price determined by the administrators or the company’s auditors.

Ans: Following are the steps to be followed while transferring shares of a personal Limited Company:
• Step 1: Obtain the share transfer deed within the prescribed format.
• Step 2: The share transfer deed must be executed duly signed by the Transferor and Transferee.
• Step 3: Stamp the share transfer deed as per the Indian Stamp Act and stamp tax Notification effective within the State.
• Step 4: Must have a witness sign the share transfer deed with his/her signature, name and address.
• Step 5: The share certificate/ Allotment letter must be attached with the transfer deed and deliver an equivalent to the corporate .
• Step 6: the corporate must process the documents and if approved, issue new share certificate within the name of the transferee.

Ans: Companies Act, 2013 requires that where share transfer form is delivered to the Board it should be duly stamped, with adequate value, and dated and cancelled as per section12 of the Indian Stamp Act . Generally, the transferee is liable for the payment of the stamp tax .
Being the transfer of Shares are subject to the central stamp tax , accordingly, as per the supply of Article 62 (a), Schedule I of Indian Stamp Act , 1899, the transferee is required to pay stamp tax at the speed of Rs 0.25 for each Rs 100 of the worth of the share. Special adhesive stamps bearing the word “share transfer” shall be used for stamping for share transfers.