11 July 2024
The transfer of shares between shareholders of a company involves several steps and compliances under the Companies Act, 2013. Here’s a general outline of the process and the relevant forms typically used:
### Process for Transfer of Shares:
1. **Board Resolution**: The board of directors of the company needs to pass a resolution approving the transfer of shares and accepting the resignation of the director. This resolution should be passed in a board meeting.
2. **Share Transfer Agreement**: The parties involved (the resigning director and the shareholders receiving the shares) should enter into a Share Transfer Agreement detailing the terms and conditions of the share transfer.
3. **Payment of Stamp Duty**: Stamp duty is payable on share transfers, and it varies from state to state in India. The Share Transfer Agreement should be stamped as per the applicable stamp duty rates.
4. **Execution of Share Transfer Form**: The resigning director should execute a Share Transfer Form (Form SH-4) to transfer their shares to the other shareholders. This form must be duly filled, signed, and dated by the transferor (resigning director) and transferee (receiving shareholders).
5. **Approval by the Board**: The board of directors needs to approve the transfer by passing a resolution. This is typically done based on the Share Transfer Form and supporting documents.
6. **Intimation to Registrar**: The company should file the Share Transfer Form (Form SH-4) with the Registrar of Companies (ROC) within 60 days of the transfer along with the payment of applicable filing fees.
### Forms Required:
1. **Form SH-4**: This form is used for transferring shares from one shareholder to another. It requires details of the transferor, transferee, shares being transferred, consideration paid (if any), and details of the board resolution approving the transfer.
2. **Board Resolution**: While not a form per se, a board resolution approving the share transfer is essential and should accompany Form SH-4.
### Steps Involved:
- Prepare the Share Transfer Agreement detailing all terms and conditions. - Obtain necessary stamp duty on the Share Transfer Agreement. - Execute Form SH-4 with requisite signatures. - Pass a board resolution approving the share transfer. - File Form SH-4 along with the required documents and payment of fees with the ROC within the stipulated time.
### Additional Considerations:
- **Shareholder Agreement**: If there is a shareholder agreement in place, ensure that the transfer complies with its provisions. - **Tax Implications**: Consider any tax implications arising from the transfer of shares. - **Legal Advice**: It is advisable to seek legal counsel to ensure compliance with all applicable laws and regulations.
By following these steps and completing the necessary forms, you can effectively transfer shares between shareholders of the company in accordance with the Companies Act, 2013 and other relevant laws.
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