27 January 2022
Can a person who is the first holder of shares (physical certificate) transfer shares in his single name, since the 2nd Holder (a friend) has not been traceable since more than 10 years.
11 July 2024
Yes, it is possible for the first holder of shares (the sole named shareholder on the physical share certificate) to transfer the shares in their single name, even if the second holder (co-holder or joint holder) is not traceable for more than 10 years. Here are the typical steps and considerations:
1. **Identify Ownership Structure**: Determine the nature of the ownership on the physical share certificate. If the certificate lists two holders (e.g., "Mr. A and Mr. B"), but Mr. B is untraceable, the shares are considered to be held jointly.
2. **Legal Status**: In the absence of the second holder (Mr. B), the shares are still legally owned by the first holder (Mr. A). The non-traceability of Mr. B does not affect Mr. A's ownership rights.
3. **Transfer Process**: To transfer the shares solely into Mr. A's name: - **Documentation**: Prepare a transfer deed (Form SH-4 for private companies in India) to transfer the shares from Mr. A and Mr. B to Mr. A only. - **Affidavit**: Depending on local regulations, an affidavit stating that Mr. B is untraceable and providing details of efforts made to locate Mr. B may be required. - **Publication**: In some jurisdictions, a public notice in newspapers about the intention to transfer shares due to untraceability of Mr. B may be necessary. - **Legal Advice**: It's advisable to seek legal advice to ensure compliance with local laws and regulations regarding share transfers.
4. **Authority and Documentation**: Mr. A, being the sole holder of the shares now, has the authority to initiate and execute the transfer process. He would sign all necessary documents as the transferor and the new holder of the shares.
5. **Registrar of Companies (ROC)**: File the transfer deed and any other required documents with the ROC or relevant regulatory authority as per local company law provisions.
6. **Record Update**: After the transfer is completed and accepted by the company, the share register will reflect Mr. A as the sole holder of the shares.
7. **Legal Implications**: Ensure that the transfer process adheres to all legal requirements to avoid any future disputes or challenges.
In summary, Mr. A can transfer the shares into his single name by following the prescribed legal process, including documentation, verification of Mr. B's non-traceability, and compliance with regulatory requirements. Seeking legal advice specific to the jurisdiction and company law regulations is recommended to ensure a smooth and valid transfer of shares.
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