Share Transfer

Advantages of share transfer

• The advantages of Share transfer are capital increment, pay entitlement, limited liability, right share demand over earnings and assets, bonus shares and more.
• Another advantage is it helps in decreasing tax bill.
• Can be the owner of the flourishing business.
• Can be also aligned with the new private buyers equity.

Procedure for starting a share transfer

Listed below are the steps for initiating the share transfer procedure.

1. Examine the Articles of Association of the private limited company should be analysed and if any restriction should be mentioned.
2. Shareholder should prior notify in writing to the director of the company addressing about the motif to transfer share of the company.
3. According to AOA, decide the price at which the shares of the company will be first provided to the present shareholders. Basically the price is decided by the directors of the company or an auditor.
4. The company should provide notice to other shareholders lamenting about the last due to purchase the shares and availability of share.

Transferring shares of a private limited company.

Listed below are the steps that should be followed in order to effect the share transfer;

1. Acquire the prescribed format of the share transfer deed.
2. Carry out the share transfer deed properly signed by the transferee and transferor.
3. Stamp the Share transfer deed according to the Indian stamp act and stamp duty notification in force in the state.
4. Eye-witness signing the share transfer deed with the person s name, address and signature.
5. Affix the certificate of share or letter allotment with the transfer deed and should provide the same to the company.
6. Documents should be actioned by the company and if it is sanctioned issue the new certificate in the name of the transferee.

Checklist information for share transfer.

• Notice declaration in outlining the persons motive to transfer his shares to the organization.
• Obtain the transfer of shares agreement in form SH-4mduly performed by both the transferor and the transferee. it should be accurately recorded and marked.
• The span of term for the security of devices for transfer with the company must be notified.
• The price or the amount of share transfer stamps should be affixed on the agreement.
• The certificate of share letter of distribution.
• Board resolution and nomination of authority.
• Issue of the share certificate.