Private Limited Company Share Transfer Services
- We assess your Articles of Association to identify share transfer restrictions, pre-emptive rights, and directorial approvals needed before initiating a transfer.
- Assistance in determining the fair value of shares, in line with AOA provisions or auditor-led valuation, especially important for pre-emptive rights or shareholder notifications.
- Drafting and stamping of the Form SH‑4 Share Transfer Deed, including witness attestation, PAN verification, and supporting documentation preparation.
- Drafting of Board Resolutions, updating the Register of Members, and recording changes in statutory records following successful transfer.
- Drafting of Board Resolutions, updating the Register of Members, and recording changes in statutory records following successful transfer.
Need help?
Services
What is a Share Transfer?
A share transfer involves legally transferring ownership of company shares from one party (transferor) to another (transferee). In private limited companies, this process is governed by:
- Companies Act 2013 (Section 56)
- Company's Articles of Association (AOA)
- Share Capital Rules 2014 Shares act like movable property but may have AOA-imposed restrictions. *CA Vakeel ensures compliant, dispute-free transfers in 15 days.*
Regulations Governing Share Transfers
| Provision | Requirement |
|---|---|
| Section 56(1) | Transfers must use Form SH-4 deed stamped per state rates. |
| Rule 11(2) | The board must approve/reject transfers within 30 days. |
| AOA Clauses | Pre-emptive rights, director approval, or valuation methods may apply. |
| Stamp Duty | 0.015% of share value (e.g., ₹1,500 for ₹10L transfer). |
Non-compliance risks transfer rejection or penalties.
Common AOA Limitations
Private companies often impose:
- Pre-emptive Rights: Existing shareholders get first refusal to buy shares.
- Director Veto: Board can reject transfers to undesirable parties.
- Pricing Controls: Shares must be sold at fair value (set by auditor/director).
- Family Transfers: Easier transfers among relatives may be allowed.
Always check AOA before initiating transfers.
Who is Involved?
- Transferor: Current shareholder selling shares.
- Transferee: New shareholder buying shares.
- Company Directors: Approve/reject transfers per AOA.
- Existing Shareholders: Exercise pre-emptive rights.
- Legal Heirs: In case of shareholder death.
Essential Papers for Share Transfer
| Document | Purpose | Format |
|---|---|---|
| Duly Stamped Form SH-4 | Primary transfer deed (signed by both parties) | Physical + Digital |
| Original Share Certificate | Proof of ownership | Physical |
| Board Resolution | Approval of share transfer | PDF (DSC-signed) |
| PAN Card | Transferee identity proof | Copy |
| No Objection Certificate | Transferor consent (if required) | Signed Letter |
| Indemnity Bond | Protects company from transfer disputes | Notarized |
How to Transfer Shares in 7 Steps
Step 1: Verify AOA Restrictions
- Confirm pre-emptive rights/director approval requirements.
Step 2: Notify Company & Shareholders
- Transferor informs board of intent to sell.
- Company offers shares to existing shareholders (if AOA mandates).
Step 3: Execute Form SH-4
- Fill deed with:
- Company/share details
- Transferor + transferee info
- Witness signatures
- Pay stamp duty via GRAS portal.
Step 4: Board Approval
- Directors pass resolution accepting/rejecting transfer within 30 days.
Step 5: Update Statutory Records
- Cancel transferor’s share certificate.
- Issue new certificate to transferee.
- Update:
- Register of Members
- Register of Transfers
Step 6: File Forms with ROC
- Form PAS-3: Report share allotment within 15 days.
- Form MGT-14: Register board resolution (if AOA amended).
Step 7: Post-Transfer Compliance
- Notify bank/GST authorities about ownership change.
- Update ESOP records (if applicable).
Non-Standard Transfer Scenarios
- Transmission on Death: Legal heirs inherit shares (submit death certificate + succession proof).
- Pledge Releases: Banks/NBFCs transfer pledged shares on loan repayment (no SH-4 needed).
- Corporate Transfers: Director/nominee transfers for holding companies (Section 187 exemption).
- Court Orders: Enforced transfers via mergers/insolvency resolutions.
Hassle-Free Share Transfer Service
CA Vakeel provides: AOA Analysis: Identify restrictions/pre-emptive rights. Document Drafting: Form SH-4, board resolutions, indemnity bonds. Stamp Duty Payment: State-specific e-stamping. ROC Filings: PAS-3 + MGT-14 submission + tracking. Dispute Prevention: NOC management + shareholder coordination. Post-Transfer Compliance: Statutory register updates.
*"We’ve processed 500+ share transfers with 100% MCA approval."*