Transfer of Shares
Your trusted partner for ownership restructuring — ensuring legally compliant transfer of shares with proper documentation, valuation, and MCA compliance.
Overview
A Transfer of Shares refers to the process by which an existing shareholder transfers ownership of shares to another person or entity, resulting in a change in the shareholding structure of the company. Share transfer is strictly governed under the Companies Act, 2013 and the company’s Articles of Association (AOA).
Unlike share allotment (which creates new shares), share transfer involves the movement of existing shares. This process is essential for investor exits, internal restructuring, or selling a stake in the business. Proper execution of the Share Transfer Deed (Form SH-4) and payment of stamp duty are critical legal requirements.
Key Benefits
Ownership Restructuring
Easily adjust the equity distribution within your company to reflect new investments or changes in leadership.
Investor Exit & Entry
Provide a clear legal path for existing investors to exit and new ones to acquire their stakes seamlessly.
Legal Recognition
Ensure that the change in ownership is officially recorded in the company's Register of Members and statutory books.
Business Continuity
Facilitate smooth transitions of power or ownership without disrupting the company's operational activities.
Capital Gains Tracking
Maintain accurate records for tax purposes, ensuring capital gains are calculated on a clear legal transfer date.
Statutory Compliance
Adhere to the Companies Act and AOA provisions to prevent any future disputes regarding share ownership.
Eligibility Requirements
Ensure your business meets these basic criteria for a smooth registration process.
Expert Tip
Having all directors present in India is not mandatory, but at least one director must be a resident of India (stayed in India for 182+ days).
Documents Required
Keep these documents ready to fast-track your application.
Corporate Documents
- Certificate of Incorporation
- Memorandum & Articles of Association
- Current Register of Members
Transfer Documents
- Share Transfer Deed (Form SH-4)
- Original Share Certificates
- Board Resolution for Transfer
Parties Identity
- PAN & ID Proof of Transferor
- PAN & ID Proof of Transferee
- Proof of Stamp Duty Payment
Registration Process
Our seamless digital-first approach ensures completion in the fastest possible time.
Review of AOA Provisions
Ensuring the Articles do not have restrictions on the proposed share transfer.
Execution of SH-4 Deed
Drafting and signing of the Share Transfer Deed by both transferor and transferee.
Stamp Duty Payment
Paying the mandatory stamp duty (0.025% of market value/consideration) to the government.
Submission to Company
Delivering the executed SH-4 and original share certificates to the company's registered office.
Board Review & Approval
Convening a Board Meeting to approve the transfer and record it in the minutes.
Endorsement of Certificates
Recording the transfer details on the back of the original share certificates.
Update Register of Members
Formally updating the MGT-1 register to reflect the name of the new shareholder.
Compliance Completion
Providing the new shareholder with the endorsed share certificates as proof of ownership.
Mandatory Compliance
Staying compliant is crucial for your company's good standing. Non-compliance may lead to penalties and director disqualification.
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FAQs
Common questions about Transfer of Shares
Restructure Your Ownership Seamlessly
Manage your company's share transfers with complete legal accuracy and expert support from Bizmint LLP.