Share Transfer
Recommendedexclusive of MCA Fees & Stamp Duties
Starting from₹1999
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exclusive of MCA Fees & Stamp Duties
Government fees and third-party charges apply where mentioned.
A share transfer is a structured process through which ownership in a Private Limited Company moves from one person to another.
Shares represent portions of company ownership and may be bought, sold, or transferred subject to the Companies Act, 2013, MCA rules, and the company's Articles of Association.
LegallensIndia assists Private Limited Companies in completing share transfers smoothly and in accordance with the applicable legal requirements.
Share transfer occurs when a shareholder voluntarily passes the ownership rights and potential obligations attached to company shares to another person.
The transferor gives up membership relating to those shares, and the transferee seeks to become their new holder.
Shares can generally be transferred like other movable property, subject to restrictions contained in the Articles of Association.
Share transfers in a Private Limited Company are governed by Sections 56(1) and 56(3) of the Companies Act, 2013 and Rules 11(1), 11(2), and 11(3) of the Companies (Share Capital and Debentures) Rules, 2014. These provisions support corporate governance and preservation of the company's private status.
The company's Articles of Association govern its share-transfer procedure and must be reviewed before any transfer begins.
A shareholder wishing to sell shares must first offer them to existing members at a price determined by the directors or company auditor using the valuation method stated in the Articles.
If existing shareholders do not purchase the shares, they may be offered to a person outside the company.
The Articles may authorise directors to refuse a proposed transfer, giving the Board significant control over who can become a shareholder.
| Document | Purpose |
|---|---|
| Share Transfer Deed | Records the transfer and carries the signatures of the seller and buyer |
| Original Share Certificate | Submitted by the transferor with the transfer deed |
| Transferee's PAN Card | Establishes the buyer's PAN details |
| Board Resolution | Records Board approval of the share transfer |
| No Objection Certificate | May be requested to confirm the seller's consent |
| Indemnity Bond | May protect the company against transfer-related losses |
| Stamp Duty Proof | Confirms payment of the applicable state-based stamp duty |
Examine the Articles of Association for transfer restrictions, pre-emption rights, valuation methods, and other conditions.
The shareholder formally informs a company director of the intention to transfer the shares.
Set the share price according to the Articles, generally through the directors or company auditor. This becomes the initial offer price for existing shareholders.
Inform all shareholders of the available shares, offer price, and deadline for expressing interest.
Allocate the shares first to interested existing members. If no member is interested or shares remain, they may be offered to an outside party.
Obtain the official transfer deed in Form SH-4 and have it endorsed by a recognised authority. This is the primary document used to execute the transfer.
The transferor and transferee must sign the deed. Pay and affix stamp duty in accordance with the Indian Stamp Act and the applicable state rate.
A witness signs the deed and provides their name and address to validate its execution.
Attach the original share certificate or allotment letter to the completed deed and submit the documents to the company.
After checking and accepting the transfer documents, the company issues a new certificate to the transferee and formally recognises the new shareholder.
LegallensIndia assists with reviewing the Articles of Association, applying pre-emptive rights, preparing and executing Form SH-4, calculating stamp-duty requirements, submitting documents, and completing the company's approval process.
The service helps Private Limited Companies transfer shares smoothly while maintaining legal and regulatory compliance.