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Business & Compliance

CHANGES AND CORRECTIONS

Share Transfer


Share Transfer:

The transfer of shares from one person to another by executing a share transfer deed. The ownership of a company limited by shares is held by the shareholders of the Company. The shareholders, in turn, appoint Directors to manage the affairs of the Company. Hence, ownership of a company rests with the shareholders and not the Directors. Transfer of ownership of a company can, therefore, be accomplished by transferring shares of the company from one person or entity to another. Share transfer in a private limited company is usually more restricted when compared to a listed company that is publicly traded. The entire shares of a private limited company are usually owned by a family or a small group of persons or entities. Hence, most of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider. Therefore, it is important to review the Articles of Association of the Company prior to effecting a share transfer. We help you transfer shares of a private limited company by completing the necessary procedures as per Companies Act, 2013.

DOCUMENTS REQUIRED FOR THE SHARE TRANSFER IS:- (All copies of documents should be self attested by the customer)

Consent Letter duly signed by the seller and buyer.

The shareholding pattern of the investee company after the acquisition of shares by a person resident outside India

Certificate indicating fair value of shares from a Chartered Accountant

Declaration from the buyer to the effect that he is eligible to acquire

Declaration from the FII/sub-account to the effect that the individual FII / Sub-account ceiling as prescribed has not been breached

If the sellers are NRIs/OCBs, the copies of RBI approvals, if applicable, evidencing the shares held by them on repatriation/non-repatriation basis.

No Objection/Tax Clearance Certificate from Income Tax Authority/Chartered Account.

A process of Transferring Shares:

Shareholders are the legal owners of the shares of a company. Shareholders can be natural persons or corporate entities. They can also be NRIs or Foreign Nationals or Foreign Entities. Shareholders are the owners of a Company.

Directors of a company are appointed by the shareholders of a company to manage the affairs of a company. Directors are not owners of a company. However, Directors can also be shareholders and shareholders can also be Directors.

The article of association of a company defines the rights and responsibilities of shareholders and Directors. Articles of Association of a company can restrict the share transfer in a private limited company.

The authorized capital of a Company determines the value and number of shares a Company can issue to its shareholders.

Paid up share capital of a company is the amount of money for which shares were issued to the shareholder for which payment was made by the shareholder.