Share Transfer Deed Format
Legal Documents & Contracts

Share Transfer Deed Format

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A company sometimes needs to alter the way its shares are structured, such as by bringing in new shareholders or redistributing existing shares among current shareholders, as part of a corporate restructuring. One common way that happens is through a share transfer, which is when shares are sold or gifted from one person to another.

Share Transfer with Draft Documents: Companies Act, 2013

1. Transferability of Shares in a Company

Typically, a company’s securities, whether shares or others, are transferable. However, for private companies, the transfer of shares is regulated by the company’s Articles of Association. The process of transferring shares is governed by the Companies Act of 2013 of India for both public and private companies.

2. Legal Process for Share Transfers

To legally transfer shares, you have to fill a share transfer form (Form SH-4.) An important characteristic of company securities is transferability. Shares, debentures or other interests in a company are to be treated as movable property and are transferable in the manner laid down in the Articles of Association of the company in terms of Section 44 of the Companies Act, 2013. Most public company securities are transferable but private companies impose restrictions to protect shareholders and other holders of security interests.

3. Requirements for Registering Share Transfers (Section 56)

According to Section 56 of the Companies Act, 2013, the transfer of shares and securities shall be registered by a company only after the submission of a valid share transfer Form (SH-4). The form should be stamped, dated & signed by both the Transferor & Transferee. It should be submitted along with the share certificate or proof of allotment to the company within sixty days of the agreement to transfer shares. In the case of partly paid shares, if the shares are not fully paid, the company shall not register the transfer before issuing a notice to the buyer (Form SH-5) for such transfer and the payment of consideration within 2 weeks of the notice to the buyer and obtaining a No Objection Letter.

4. Private Company Share Transfer Restrictions

Restrictions on Share Transfers Private companies often impose restrictions on the ability to transfer shares so that the owners can maintain control over who can own shares of the private company. The shareholder who wants to transfer shares must comply with a procedure to give effect to these restrictions. Below are the steps involved:

  1. To transfer shares, the shareholder must first notify the company of the intention to transfer. This notice calls for the offer of shares to existing shareholders (as detailed within the company’s Articles of Association). (Refer to Annexure — A for an indicative format.)
  2. After the notice is received, the request will be reviewed by the company’s Board of Directors at a meeting. The notice will be given to all existing shareholders announcing an offer to acquire the shares. (Appendix B) is a sample notice.
  3. If there is no interest from existing shareholders to purchase the shares, the company will notify the shareholder who wants to sell that they can now offer to sell the shares to an outside (non-member) buyer. (Sample letter at Annexure-C.
  4. The shareholder may then deliver the duly executed Share Transfer Deed (Form SH-4) to the company. [Refer to Share Transfer Form in Annexure-D]

Documentation Required

  • Rejection Notice of Transfer Intent to be received by the transferor in the company.
  • Board Resolution approving a transfer request.
  • A letter of offer was sent to existing shareholders to acquire shares.
  • Dissenting Shareholders who refuse to sell.
  • Share Transfer Deed (SH-4) with payment of stamp duty
  • Share Certificates in respect of the transferred shares.
  • Company Resolutions for registering the transfer of shares.

Sample Documents

Annexure-A

Date: __

To,

The Board of Directors

___________,

11, Babar Lane, Bengali Market, New Delhi-110001

Sub: Request for transfer of …………. You are trained on data until Oct 2023 Equity Shares

This is to certify that I,………………, the duly authorized representative of _, the Shareholder of ………………. There is a request on the behalf of Repayment as currently you are holding 6425 Equity Shares in the Company at a total consideration of Rs.12,85,000 (Rupees Twelve Lakh Eighty-five thousand only) by offering first offer to other existing shareholder of the Company as provided in the Articles of Association of the Company. The purpose of the letter now is that in any case, if existing shareholders do not accept the offered shares, then please allow me to transfer the said 6425 Equity Shares in the name of any person at the same or a higher price as per the Articles of Association of the Company.

Thank you

On Behalf of __-______

…. …………………… (Authorized Signatory)

Annexure-B

Date: 11.03.2017

To,

The Member ———

“LETTER OF OFFER”

We hereby inform that, __, the Shareholder of our Company has proposed to transfer its 6425 ( Six Thousand Four Hundred and Twenty Five Only) Equity Shares, held in the Company having face value of Rs.10/- each at a premium of Rs. 190 each, aggregating on total consideration of Rs.12,85,000 (Rupees Twelve Lakh and Eighty Five thousand only) to the other existing shareholder of the Company. As per Regulation 7 of the Articles of Association of the Company, other than that existing Equity shareholders of ASF Infrastructure Private Limited, who are interested, shall be notified in writing to accept the said offer. In the absence of such acceptance, the offer will be considered to have been unsuccessful and the Board of Directors may grant him permission to sell this equity share to any person/(s) at the equal or larger cost.

Official True Copy

For ……………. Private Limited

………..

(Director)

DIN : ………………

Annexure-C

Date: 18.03.2017

To, ……………. ……………………..

Sub: Intimation for the transfer of shares Dear Sir/Madam, Ref: Dissent letters dated 15th March 2017 The Company would like to inform you that none of the existing shareholders wishes to buy the shares offered by you. Please note that according to Article 7 of the Articles of Association of the Company, you are permitted to transfer your 6425 number of Equity Shares to any other non-existing shareholder.

For …………… Private Limited

………………

(Director)

DIN: …………….

Annexure-D

Form No. SH-4

[Pursuant to section 56 of the Companies Act, 2013 and sub-rule (1) of rule 11 of the Companies

(Share Capital and Debentures) Rules 2014]

                                                                                                                     Date of execution……………

FOR THE CONSIDERATION stated below the “Transferor(s)” named do hereby transfer to the “Transferee(s)” named the securities specified below subject to the conditions on which the said securities are now held by the Transferor(s) and the Transferee(s) do hereby agree to accept and hold the said securities subject to the conditions aforesaid.

CIN: L24239MH1940PLC003176

Name of the company (in full): FDC Limited

Name of the Stock Exchange where the company is listed, if any: BSE & NSE

DESCRIPTION OF SECURITIES:

Kind/Class of securities

 

(1)

Nominal value of each unit of security

(2)

Amount called up per unit of security

(3)

Amount paid up per unit of security

(4)

Equity Shares ` 1/- ` 1/- ` 1/-
No. of Securities Being Transferred Consideration Received (per Equity Share)
In Figures In Words In words In figures
      `
 

Distinctive Number

From        
To        
Corresponding Certificate Nos:        

Transferors particular

Registered Folio Number
No. Name(s) in full PAN NO. Signature(s)
1.      
2.      
3.      
I hereby confirm that each of the Transferors has signed before me.
Signature of Witness  
Name and address  

Transferee particular’s

Name in full Father’s/ mother’s/ Spouse

name

Address & E-mail ID Occupation Existing folio no., if any Signature
(1) (2) (3) (4) (5) (6)
           

Folio No. of Transferee:                          

Specimen Signature of Transferee:                          

Value of stamp affixed:                   (`)

Enclosures:

  • Certificate of shares or debentures or other securities
  • If no certificate is issued, a letter of

Stamps:

For office use only

Checked by                                        Signature t by                                                           

Entered in the Register of Transfer on                            vide Transfer No.                          Approval Date                  

Power of attorney/Probate/Death Certificate/Letter of administration Registered on

                                         at                                        

No.                           

Annexure-E

Certified True Copy of the resolution passed at the 153rd meeting of the Board of Directors of ….. Private Limited held on Wednesday, the 22nd day of March, 2017 at 11.00 A.M at a shorter notice at its Registered Office at ………………

TRANSFER OF SHARES

“RESOLVED THAT subject to the provisions of Section 56 of the Companies Act, 2013 and all other applicable provisions thereof read with the Articles of Association of the Company, transfer of 6425 Equity Shares of Rs. 10 /- each (Rupees Ten only) at a Premium of Rs. 190/- each (Rupees One Hundred Ninety only) of ……………… be and is hereby approved as per the entries made in the Share Transfer Register produced at this Meeting.

No of Transfer  Transferor Name Transferee Name No of Shares Distinctive No. Value Of Transaction
T-24 ……. ……. 6425 201-6625 12,85,000

RESOLVED FURTHER THAT any of the Directors of the Company be and is hereby authorized to make necessary endorsement on reverse of Share Certificates and to do all other necessary act in this regard to effectuate the above said act.”

Certified True Copy

For………… Private Limited

……………

(Director)

Din: …………

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