Distinctive numbers of the shares given in the instrument are same as are given in the enclosed share certificate. Sections of the Companies Act, 2013 Rule Number Nature of application or petition Fees 1 Sub-section 1 of section 230 3 1 Application for compromise arrangement and amalgamation. Step 6: Once the share transfer deed is delivered to the company, the board of directors shall consider the same. Notices may only be served and delivered in English. The stamp duty is calculated based on the purchase price or market value of the shares transferred, whichever is higher. Where does it state that the shares are still owned by the original shareholders? However the Board shall not direct such surrender unless the member has served with a written notice and give an opportunity of being heard. Within 3 months from the date of his becoming member, such person shall nominate his nominee, to whom the shares shall vest in the event of his death.
Unless noted, a restriction is not enforceable against a person without knowledge of the restriction. A is the document usually used for the transfer of shares. If the board refuses to register the transfer of shares then a notice will be served to the transferee within 30 days of receipt of such share deed and an appeal can be done to the tribunal within 30 days from the date of notice served by the company. However, if the board of director feels that the documentations are not in or order, or the steps aforementioned are not complied with, the board retains the right of refusal of transfer of such shares to the transferee. B Procedure where transferor sells part or all of his shares to more than one purchaser; The shareholder executes the instrument of transfer with his share certificate and sends them to the company with a request to recognize and register the instrument. Company also alters its share capital if it intends to increase the per share value of its share capital or reciprocally to decrease the amount of share capital. The notice to the transferee shall be deemed to have been duly given if it is dispatched by prepaid registered post to the transferee at the address given in the instrument of transfer, and shall be deemed to have been duly delivered at the time at which it would have been delivered in the ordinary course of post.
The form is designed to be used as written resolution without holding a board meeting. The present rate of transfer of shares is 25 Paise for every one hundred rupees of the value of shares or part. Share certificate or allotment letter needs to be attached to the share transfer deed and deliver it to the company. Exemptions cover a whole range of possible scenarios, which are covered in our. The current rate for stamp duty is 0. It should be endorsed by the prescribed authority. It is not lawful for a company to register a transfer of shares unless a duly stamped proper instrument of transfer has been delivered to it, or the transfer is an exempt transfer within the Stock Transfer Act 1982.
Such notice shall specify the sum he fixes as the fair value, and shall constitute the Company his agents for the sale of the share to any Member of the Company or persons selected as aforesaid, at the price so fixed, or at the option of the purchaser, at the fair value to be fixed by the Auditor of the Company in accordance with these Articles. If the instrument received is deficient in any respect, the same should be returned to the person who had lodged the same with the company for making good the deficiency. The directors may refuse to register the transfer of a share which is not fully paid to a person of whom they do not approve and they may refuse to register the transfer of a share on which the company has a lien. Where the Central Government has granted extension of time under section 108 D of the Act for filing an executed instrument, check, whether the instrument has been lodged with the company with in the extended period of time. When pre-emption rights exist, you have to offer available shares to existing members before offering them to non-members. The company shall be entitled to retain any instrument of transfer which is registered, but any instrument of transfer which the directors refuse to register shall be returned to the person lodging it when notice of the refusal is given. If partly paid-up shares are being transferred and transferee is known to be financially incapable of paying balance calls.
Shareholders exercise certain powers over how the company is run such as electing the board of directors. For ready reference you may bookmark this page. . Before agreeing to buying shares the purchaser may, particularly if the amounts are significant, wish to obtain a professional valuation and draw up a detailed contract for the purchase. Provisions vary from a simple power for the directors to decline any transfer as found in the Model Articles to pre-emption provisions, free transfers to family members and even provisions for enforced transfer in certain circumstances e. PandaTip: You may wish to initial the pages in this agreement to ensure that the schedule could not be changed later. If you wish this cost to be borne by the Transferor or shared between the two Parties then you can amend the above clause.
A Private Limited Company cannot invite public to subscribe to any securities of the company. Circumstances in Which a Listed Company can Refuse to Transfer Shares In terms of Sec. Also, If the transferee feels that such refusal is arbitrary and unreasonable, an appeal lies with the Tribunal within thirty days of receipt of notice by the company of such refusal for the transfer of shares or in case there is no notice served by company, the appeal lies in the tribunal within sixty days of delivery of such share transfer deed to the company. Sec771, Companies Act 2006 provides a statutory procedure on a transfer being lodged 1 When a transfer of shares in or debentures of a company has been lodged with the company, the company must either- a register the transfer, or b give the transferee notice of refusal to register the transfer, together with its reasons for the refusal, as soon as practicable and in any event within two months after the date on which the transfer is lodged with it. Such refusal must be conveyed in writing to the transferor and the transferee within two months of the date on which the instrument was deposited with the company giving reasons for refusal. Difference in the signature of transferor One of the reason for refusal of transfer of shares is the difference in the signature s of the transferor in the share transfer deeds with the specimen signatures available in the records of the company.
We provide you with a comprehensive guide to the procedures and process for a transfer of shares. The transfer procedure in summary is: 1. Company also has the powers to cancel any share capital which is not been agreed to be taken by any person. Activation link is also sent on your email id. Signature of the transferor agrees with one available with the company. A private limited company can however, refuse registration of transfers in accordance with its Articles of Association.
Shareholders are known as the owner of a Private Limited Company. Time Frame for Processing a Share Transfer The transfer of share could be completed in 3-5 days, depending on the schedule of the client. If the Instrument has been attested, the name, address and seal of the attestator of the signature of the transferor have been legibly given in the instrument and the attestator has signed the instrument. Where necessary, the buyer signs the stock transfer form 3. Otherwise, the ownership of the said shares could be disputed in future. You will then notify Companies House of the transfer only in your next annual return. Main Provisions related to Transfer of Share: Now that we have read about the two key terms, we are to examine the legal angle of transferability of shares in a private company.
Remedy against Refusal to Transfer The transferor or transferee are entitled to appeal to the National Company Law Tribunal against any refusal of the company to register the transfer or against any failure on its part within the period of two months either to register the transfer or to send notices of its refusal to register the same. PandaTip: Add in the cost here. This would reduce their percentage of ownership, thus the amount of control they have and their profit entitlement. To avoid this situation, it is advisable to provide an option to the members for furnishing fresh specimen signatures for the records of the company. The company has the power of refusal of registration for transfer of shares but it should be exercised within thirty days of delivery of the instrument of transfer to the company. In case due call money has not been paid by the transferor. You will also provide details of any new shareholders at the same time.
This share transfer agreement template is suitable for the transfer of shares in both private and public companies and can be used in place of a stock transfer form, or in addition to one. If you are referring to the memorandum, that is normal. If the above conditions are not satisfied, it will be necessary to hold a meeting. The need to do so can arise for many reasons. Valuation of share for the purpose of transfer of shares of a private company Normally Articles of a private company contain provisions in this regard and provides that the shares are to be sold at a fair price determined by directors or the company's auditors.