Company Share Transfer and Transmission

A Share capital of the company comprises of total funds collected from the shareholders against issue of shares. This share capital is “Capital” in the hands of the company and “investment” in the hands of the shareholders. Shares of the company being “investment” in the hands of shareholders are freely transferable. Thus, transfer of shares takes place in open market. Share Transfer and Transmission are two different things, in transfer of shares there are two parties transferor and transferee who voluntary come together for exchange of shares for a consideration “price” to be paid and upon this consideration relevant stamp duty is also made payable. On the other hand transmission of shares comes under operation of law i.e. in case of death / insolvency / inheritance etc. Under this transmission of shares since no consideration is paid so no stamp duty attracted. Procedure involved in share transfer and transmission are:

1. There must be a “Transfer Deed” properly executed in Form SH-4 endorsed by prescribed authority.
2. The transfer deed must be properly stamped as per Indian Stamp Act, the rate of stamp duty for transfer of shares is 25 paise for every INR one hundred rupee.
3. This stamp needs to be cancelled at the time of signing of transfer deed.
4. Ensure that both transferor and transferee must sign the transfer deed in the presence of approval and approval need also sign this transfer deed.
5. Properly executed Share Certificate must accompany share transfer deed.
6. In case the shares are partly paid-up then the company shall notify the remaining amount due to the transferee and a No Objection Certificate from the transferee is required to be obtained within two weeks from the date of communication. Notification of remaining amount due shall be communicated by the company to transferee in Form SH-5
7. In case the shares are listed on any recognized stock exchange then company cannot charge any fee for transfer of shares.

Time Limits for delivery of share certificates: In case of proper transfer of share the company shall issue share certificates to the transferee within one month from the date of receipt of documents for transfer of shares. In case of newly incorporated entity share certificates must be issued within two months to the subscriber of memorandum from the date of incorporation. With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your transfer or transmission of shares and thereafter will provide you detailed analysis mentioning the law requirement and compliances need to fulfil in order to provide share transfer and transmission related services economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliances. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliances need for company share transfer and transmission.