Share Transfer
Quick Answer
Share Transfer India refers to the process of transferring ownership of shares from one person to another in a company. Governed by the Companies Act, 2013, this procedure is essential for business changes such as restructuring, succession, or exit of shareholders.
Share Transfer — detailed explanation below
Governing Act — Share Transfer India
The primary legislation governing share transfers in India is the Companies Act, 2013. Key sections include Section 56 (transfer and transmission of securities), Section 58 (refusal of transfer), and Section 89 (declaration of beneficial interest). The Act prescribes the procedure, forms, and timelines for valid share transfers.
Government Department & Website for Share Transfer India
The Ministry of Corporate Affairs (MCA) oversees share transfers through the Registrar of Companies (ROC). The official portal for filing forms is www.mca.gov.in. Companies must file e-forms such as SH-4 (for transfer) and MGT-14 (for board resolutions) on this portal.
Share Transfer India Application Process
The process for share transfer in India involves: (1) Execution of a share transfer deed (Form SH-4) by the transferor and transferee; (2) Delivery of the share certificate and deed to the company; (3) Board resolution approving the transfer; (4) Filing of Form MGT-14 with ROC within 30 days; (5) Issuance of new share certificate to the transferee. The company must register the transfer within 2 months of application.
Key Forms Required for Share Transfer India
The key forms for share transfer in India are:
- Form SH-4: Share transfer deed (stamped and executed)
- Form MGT-14: Filing of board resolution with ROC
- Form SH-5: Notice for refusal of transfer (if applicable)
- Form PAS-3: Return of allotment (for new shares) These forms are filed electronically on the MCA portal.
Eligibility Criteria for Share Transfer India
Any person (individual, company, or other entity) can transfer shares unless restricted by the company's Articles of Association (AOA). The transferor must be the registered holder of the shares. The transferee must be legally competent to contract. Private companies often have pre-emption rights requiring offer to existing shareholders first.
Timeline for Share Transfer India
The Companies Act, 2013 requires the company to register a share transfer within 2 months from the date of application. However, the overall timeline depends on the company's internal procedures and ROC processing. No specific timeline is prescribed for the entire process.
Fees for Share Transfer India
The government fees for share transfer are prescribed under the Companies (Registration Offices and Fees) Rules, 2014. Below is the fee structure for filing Form MGT-14:
| Nominal Share Capital | Fee Amount |
|---|---|
| Up to ₹1,00,000 | ₹200 |
| ₹1,00,001 to ₹5,00,000 | ₹300 |
| ₹5,00,001 to ₹25,00,000 | ₹500 |
| Above ₹25,00,000 | ₹1,000 |
Stamp duty on share transfer deed varies by state (e.g., 0.25% of consideration in many states).
Frequently Asked Questions
What is the procedure for share transfer India?
The procedure involves executing a share transfer deed (Form SH-4), delivering it to the company with the share certificate, obtaining board approval, filing Form MGT-14 with ROC, and issuing a new certificate. The company must register the transfer within 2 months.
What forms are required for share transfer India?
Key forms include Form SH-4 (transfer deed), Form MGT-14 (board resolution), and Form SH-5 (if transfer is refused). These are filed on the MCA portal.
Is stamp duty payable on share transfer India?
Yes, stamp duty is payable on the share transfer deed. The rate varies by state, typically 0.25% of the consideration or market value of shares.
Can a private company refuse share transfer India?
Yes, a private company may refuse transfer if its Articles of Association provide for pre-emption rights or other restrictions. The company must give notice of refusal within 2 months (Form SH-5).
What is the difference between share transfer and transmission in India?
Share transfer is a voluntary act by the shareholder, while transmission occurs by operation of law (e.g., on death or insolvency). Transmission does not require a transfer deed; the legal heir applies directly.
What is the fee for filing share transfer forms with ROC?
The fee for Form MGT-14 depends on the company's nominal share capital, ranging from ₹200 to ₹1,000 as per the Companies (Registration Offices and Fees) Rules, 2014.
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