Share Transfer
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Share Transfer
Share transfer refers to the process of transferring ownership of shares from one shareholder to another. In a Private Limited or Public Limited Company, shareholders can sell or transfer their shares based on the company’s Articles of Association (AOA) and the Companies Act, 2013.
📌 Applicable to: Private Limited, Public Limited Companies
📌 Regulatory Body: Ministry of Corporate Affairs (MCA)
📌 Governing Law: Section 56 of the Companies Act, 2013
Importance of Share Transfer
✅ Maintains Business Continuity – Smooth transition of ownership
✅ Facilitates Investment & Fundraising – Helps in bringing new investors
✅ Enables Easy Exit for Shareholders – Allows existing shareholders to liquidate shares
✅ Ensures Legal Compliance – Ensures seamless corporate governance
✅ Enhances Business Flexibility – Allows ownership restructuring for growth
Documents Required for Share Transfer
📌 Share Transfer Deed (Form SH-4) – Executed by the transferor and transferee
📌 Share Certificate – Issued by the company to verify ownership
📌 Board Resolution Copy – Approval from the board for the transfer
📌 Stamped Transfer Deed – Payment of applicable stamp duty
📌 ID & Address Proof of the Transferee – PAN, Aadhaar, or Passport
📌 No Objection Certificate (NOC) (if applicable) – In case of private companies
Benefits of Share Transfer
✅ Legally Transfers Ownership – Ensures smooth transfer of shares
✅ Encourages Investment Opportunities – Attracts potential investors & stakeholders
✅ Provides Liquidity to Shareholders – Allows easy exit from the company
✅ Ensures Regulatory Compliance – Adheres to legal provisions under the Companies Act
✅ Improves Business Stability – Helps in business succession planning