Share Transfer 

1. What is Share Transfer?
Share transfer refers to the process by which the ownership of shares in a company is transferred from one shareholder (the transferor) to another (the transferee). This process is crucial for companies, particularly private limited companies, to ensure the accurate distribution of ownership and control.

2. Types of Share Transfers:

• Private Company Share Transfer: Transfer of shares between private individuals, often requiring board approval and compliance with the company’s articles of association.
• Public Company Share Transfer: Shares can be transferred in public companies via stock exchanges, with regulatory compliance under SEBI rules.
• Transferring of Unlisted Shares: In private companies, shares can be transferred through a deed of transfer, subject to certain conditions outlined in the company’s memorandum of association.

3. Services Offered for Share Transfer:

• Share Transfer Deeds: Preparation and drafting of share transfer deeds (also known as share transfer forms) as per legal requirements.
• Board Approval: We assist in obtaining necessary approvals from the board of directors for the transfer of shares.
• Document Filing: Filing of necessary documents with the Registrar of Companies (RoC) to officially record the transfer of shares.
• Stamp Duty Calculation and Payment: Assistance in calculating and paying stamp duty on share transfers as required by Indian law.
• Updating Share Register: Updating the company’s share register and issuing new share certificates reflecting the transfer.
• Legal Compliance: Ensuring compliance with the company’s articles of association, shareholders’ agreements, and the Companies Act of 2013.

4. Process for Share Transfer in India:

1. Draft Share Transfer Deed: A deed of transfer, signed by both the transferor and transferee, must be created.
2. Board Approval: The board of directors must approve the transfer, unless restricted by the company’s articles.
3. Payment of Stamp Duty: Stamp duty must be paid on the value of the shares being transferred as per the Stamp Act.
4. Submission of Documents: The share transfer deed, along with share certificates and board approval, must be submitted to the company for recording.
5. Update of Share Register: The company updates its share register and issues new share certificates to the transferee.
6. Registrar Filing: In some cases, the company may be required to file forms with the Registrar of Companies (RoC) for official record-keeping.

5. Documents Required for Share Transfer:

• Share Transfer Deed: The deed signed by the transferor and transferee outlining the details of the transfer.
• Share Certificates: Original share certificates that need to be transferred.
• Board Resolution: A resolution by the board of directors authorizing the share transfer.
• Stamp Duty Payment Receipt: Proof of payment of stamp duty on the share transfer deed.
• KYC Documents: Identity and address proof of the transferee (e.g., PAN card, Aadhaar card, etc.).
• Company’s Articles of Association: To ensure the transfer complies with the company’s regulations.

6. Tax Implications of Share Transfer:

• Capital Gains Tax: The transfer of shares may attract capital gains tax on the difference between the sale price and the purchase price, based on whether the shares are short-term or long-term.
• Stamp Duty: Stamp duty is applicable on the transfer of shares, with rates varying based on the state in which the transfer occurs and whether the company is listed or unlisted.
• Dividend Distribution Tax (DTC): If there is any distribution of dividends in the process of share transfer, it may have tax implications.

7. Benefits of Share Transfer:

• Flexible Ownership: Share transfer allows shareholders to easily alter the ownership structure of a company without the need for complex legal procedures.
• Liquidity: Share transfer can help shareholders realize their investments by selling or transferring shares to other investors or stakeholders.
• Business Growth and Continuity: Share transfer is crucial for the continuation of a business when ownership needs to change hands, whether due to exit, inheritance, or restructuring.
• Tax Planning: Share transfers, if done efficiently, can help in planning tax liabilities related to capital gains, stamp duty, and dividend taxes.

Why Choose Us?
Our Share Transfer service ensures that the entire process is compliant with Indian company law and regulations. We help you navigate the complexities of share transfer, including document preparation, approval, stamp duty, and registration, making sure the process is smooth and legally binding. Whether you are transferring shares in a private limited company or a public company, we provide end-to-end solutions tailored to your specific needs.