Share transfer to relative

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Binu (Querist)
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01 May 2015 Dear sir,
One of director contribute to his company Rs 10 lakhs and company issue share as per this contribution. Now the said Director are ask to company to transfer 50% of his share to his brother .kindly advise whether company can do this share transfer
Thanks
Binu

CA. SHIVA SHANKARA R. SHETTY

CA. SHIVA SHANKARA R. SHETTY (Expert)
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01 May 2015 Company can issue fresh shares according to the provisions of AOA. However, it cannot be transfer the shares issued to the director or shareholder itself.

In your case, the director can transfer his shares whoever he wants as per the provisions of AOA.

After the transfer of shares, the share transfer deed (SH4) has to be filed to the company and it has been approved by the Board.

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