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What Is The Procedure For Transfer Of Shares In Private Limited Company?:-
Procedure For Transfer Of Shares In Private Limited Company
To initiate the procedure of Transfer of Shares in Private Limited Company, the following steps must be followed-
The Articles of Association or AOA must be reviewed before initiating the Transfer of Shares, and any restrictions mentioned must be identified.
The Shareholders are required to submit a notice to the directors in writing. The notice must include information regarding the intention of the share transfer.
The share transfer price must be identified as per the Articles of Association. The shares are first offered to the company’s existing shareholders as per the given price.
The company’s existing shareholders are informed about the shares available for sale, the last date of purchase and the prices at which the shares are made available for sale. If any existing shareholders are interested in the purchase, the shares are sold to them. If no existing shareholders are interested in the purchase or extra shares are available, then they are made available to people outside the company.
To proceed with the Transfer of Shares in Private Limited Company, following steps are followed-
The share transfer deed must be obtained in the directed form.
The share transfer agreement must be completed properly and should be approved by the Transferor and the transferee.
The the share transfer agreement must be stamped according to the stamp act & stamp work information in force in the State.
The Transferor must take a witness signature in the share transfer agreement with their name, sign, and address.
The share certificate or allotment letter must be attached to the transfer deed and given to the company.
The company verifies and checks the documents and if approved, a new share certificate is issued in the transferee’s name.
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Transfer of Shares in a Private Limited Company is done when one person transfers ownership of them to another. It might be a current employee or someone from the outside. The Companies Act of 2013, Section 44, further states that shares are movable property that may be transferred subject to the company’s AOA (Article of Association). Only when the company registers the transfer, the share transfer procedure will be done. The company must provide the share certificate within one month of registration, to the transferee. The transfer of shares in a private limited company is entirely done by following the norms made in AOA. In contrast, shareholders of a public ltd company can transfer their shares easily and freely.
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15 окт 2024
