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Transfer of Shares in India

Q: Can a private limited company refuse to transfer shares?

Yes, a private limited company can refuse to transfer shares, but only for "sufficient cause." This "sufficient cause" is usually detailed in their Articles of Association, such as non-compliance with pre-emption clauses, transfer to a competitor, or if the transfer is not in the company's best interest. If the company refuses, it must send notice of refusal to the transferor and transferee within 30 days of the instrument of transfer being delivered.

Q: What happens if I do not pay stamp duty on a share transfer?

If you do not pay the correct stamp duty on a share transfer deed, the deed will be considered "not duly stamped." This means it will not be admissible as evidence in a court of law, and you might face penalties, which can be up to 10 times the deficient stamp duty. Essentially, the transfer may not be legally recognized.

Q: Is there any stamp duty on the transmission of shares?

No, there is generally no stamp duty on the transmission of shares. Transmission occurs by operation of law (e.g., due to death or insolvency), not through a voluntary sale or gift requiring a transfer deed. Therefore, the instrument of transmission does not attract stamp duty.

Q: How long does the share transfer process take?

The share transfer process can vary. For physical shares in a private company, once all documents are submitted, the company has one month to register the transfer and issue new share certificates. The overall time can depend on how quickly you gather documents, pay stamp duty, and the company's internal processing time. For dematerialized shares traded on stock exchanges, the transfer is almost instantaneous.

Q: What are the SEBI guidelines for the transfer of physical shares?

SEBI's guidelines primarily impact listed companies, for which it is now mandatory to transfer shares only in dematerialized (demat) form, except in cases of transmission or transposition. For unlisted private companies, the transfer of physical shares is still permitted under the Companies Act, 2013.

Q: What is the board resolution format for the transfer of shares?

A typical board resolution for the transfer of shares will include: Date of the board meeting. Names of directors present. Reference to the receipt of the share transfer deed (Form SH-4) and original share certificate(s). Details of the transferor and transferee. Number of shares being transferred and their distinctive numbers (if applicable). A resolution approving the transfer and directing the company secretary or authorized director to update the register of members and issue new share certificates.

Transfer company shares in India with legal accuracy. RegisterKaro ensures a compliant, hassle-free process, ideal for investors and businesses seeking secure ownership transition. Start your transfer today!

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Trusted Reviews

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Frequently Asked Questions (FAQs)

What is the free transferability of shares in this company?

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"Free transferability of shares" means that the shares of a company can be bought and sold without significant restrictions. Public companies generally have free transferability, meaning shareholders can sell their shares to anyone they choose. However, private companies often have restrictions on transferability outlined in their Articles of Association to control who becomes a shareholder.

Can a private limited company refuse to transfer shares?

What happens if I do not pay stamp duty on a share transfer?

Is there any stamp duty on the transmission of shares?

How long does the share transfer process take?

What are the SEBI guidelines for the transfer of physical shares?

What is the board resolution format for the transfer of shares?

Why Choose RegisterKaro for Your Share Transfer Needs?

RegisterKaro offers expert assistance to make your share transfer process smooth and hassle-free.

Specialized in Share Transfers: We focus on the legal and procedural complexities of share transfers for both private and public companies.
Seamless Documentation Handling: From preparing the SH-4 form to affixing stamp duty and verifying share certificates, we handle it all.
AOA & Compliance Expertise: Our experts ensure the transfer complies with your company’s Articles of Association and board approval norms.
Faster Turnaround: We expedite the process to help you avoid delays, missed deadlines, and non-compliance penalties.

Why Choose RegisterKaro for Your Share Transfer Needs?

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