How do share transfer in company?

Share transfer is the process of transferring the ownership of shares from one person to another. There are different procedures and requirements for share transfer depending on the type of company, such as Private Limited or Public Limited.

Here are some general steps for share transfer:

  • The seller of the shares fills and signs a share transfer form, which is a document that records the details of the transfer.
  • The buyer of the shares may also sign the share transfer form, depending on the company’s articles of association (AOA), which are the internal rules of the company.
  • The share transfer form may need to be stamped by the revenue authorities and stamp duty may need to be paid, depending on the value of the shares and the state laws.
  • The company receives and checks the share transfer form and the share certificates, which are the documents that prove the ownership of the shares.
  • The company may accept or reject the share transfer, depending on the AOA and the corporate law. The company may also impose some restrictions or conditions on the share transfer, such as obtaining board approval or offering the shares to existing shareholders first.
  • The company updates the register of members, which is the official record of the shareholders of the company, and issues new share certificates to the buyer of the shares.
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