Share Transfer Filings: Essential Corporate Compliance

Share transfer filings are an essential part of a company’s legal and regulatory compliance. Shareholders may transfer their shares to others, which necessitates the proper documentation and filings with the Registrar of Companies (ROC). The Companies Act, 2013 governs the process of share transfer and the required filings that must be completed by the company.

What is Share Transfer?

Share transfer refers to the process through which an individual or entity (the transferor) transfers their ownership of shares in a company to another individual or entity (the transferee). The process includes the preparation and execution of the share transfer deed, submission to the company for approval, and the update of records in the register of shareholders.

Process of Share Transfer

  1. Share Transfer Deed: A share transfer deed must be executed by the transferor and transferee. The transfer deed must contain relevant details, including the number of shares being transferred, the names of the parties involved, and their signatures.
  2. Board Approval: The company’s board of directors must approve the transfer of shares. In many cases, the company's Articles of Association (AOA) may require the approval of the board before the transfer can take place.
  3. Stamp Duty Payment: The share transfer deed must be stamped as per the applicable stamp duty rates. The stamp duty is typically paid in the state where the company is registered.
  4. Filing with the Registrar of Companies (ROC): After the share transfer is completed, the company must file the share transfer details with the Registrar of Companies (ROC). This filing is done by submitting Form SH-4, which records the transfer of shares and includes the updated details in the company’s register of members.
  5. Issuance of New Share Certificates: Once the share transfer is approved and the filing is made, the company issues new share certificates to the transferee, and the old certificates are canceled.

Documents Required for Share Transfer Filing

  • Form SH-4: The share transfer form, which contains details about the transfer of shares.
  • Share Transfer Deed: Signed by both the transferor and transferee.
  • Board Resolution: A resolution from the board of directors approving the share transfer (if required).
  • Updated Register of Shareholders: A record of the shareholder details before and after the transfer.
  • Stamped Transfer Deed: Proof of stamp duty payment.

Due Dates for Filing Share Transfer

  • Form SH-4 must be filed with the Registrar of Companies (ROC) within 60 days from the date of execution of the share transfer deed.

Penalties for Non-Compliance

  • Late Filing Penalties: A penalty may be imposed for the delayed filing of Form SH-4.
  • Invalid Transfer: If the share transfer is not properly documented or filed, it could be considered invalid.
  • Non-Compliance Penalties: The company may face fines or penalties under the Companies Act, 2013.

Section Under which Share Transfer Filings are Made

  • Section 56 of the Companies Act, 2013 governs the transfer of shares in a company.

Why Choose Apnaa Filing for Share Transfer Filings?

  • Expert Assistance: We help ensure that your share transfer process is legally compliant.
  • Timely Filing: We ensure that all documents are filed with the ROC within the stipulated timelines.
  • Hassle-Free Process: We handle the paperwork and procedural steps to make the share transfer process smooth.
  • Transparency: We provide you with complete clarity on the process, so you know exactly how your share transfer will be executed.

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