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Sh4 - share transfer query in pvt ltd company

manvi (consultant) (25 Points)

27 December 2018

hi,

I have a query related to Share transfer (SH4 form) in Pvt Ltd company.

Scenario-

During the Share transfer between outgoing shareholder(A) to new shareholder (B) in a Pvt limited company; the person A signs the SH4 form which states the transfer of shares with a consideration value of lets say Rs.20,000 but in actual he has not received the money and neither does he wants this money... is the transfer legally valid? Person A is also ready to sign a form with NIL consideration...

Second query- does person A needs to hold a original copy of the transfer form SH4 and it has to be duty stamped?

appreciate quick revert on this..

thanks.

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5 Replies

heema (gulbarga) (32 Points)
Replied 28 December 2018

yes it's valid
second also yes

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Sachin C (Tax Consultant) (107 Points)
Replied 30 December 2018

Where a person Transferring the Shares does not receive any Consideration for the shares transferred, the Same has to be mentioned in the Form SH-4 (in the column as consideration received-Nil) and the same shall be accompanied by a Gift deed. However Stamp duty charges have to paid for the Transfer od shares approximately 0.25 paise per 100 Rs share, and it may vary accordingly.

In case if it is a Transfer between related person than tansfer of Shares is not Taxable per Income tax Act 1961. And if it is between unrelated parties if the Value of shares is greater than 50000 than it is Taxable.

Thank You,

Sachin C

manvi (consultant) (25 Points)
Replied 02 January 2019

Hi hema, on question 1: 1. Are you saying the transfer deed is legally VALID even if it is mentioned in transfer deed that consideration value is rs20000; but in Actual the money is NOT recived by the outgoing party? Further query: 2. If the money has to be transferred can it be in part payments and can it be done from the company bank account OR it has to be transfer from new shareholder personal account to old shareholder bank a/c? 3. Is cash transfer okay if bank transfer is not happening.

manvi (consultant) (25 Points)
Replied 02 January 2019

Hello sachin ji, The total value is less than 50000. If the document which is already signed has considersation as lets say 20000; and money not received can we overwrite the consideration column as NIL or does it have to be new document. Getting new doc signed is a challenge here as one of the party is now abroad? Further ques: 1: is the transfer deed is legally VALID even if it is mentioned in transfer deed that consideration value is rs20000; but in Actual the money is NOT recived by the outgoing party? Further query: 2. If the money has to be transferred can it be in part payments and can it be done from the company bank account OR it has to be transfer from new shareholder personal account to old shareholder bank a/c? 3. Is cash transfer okay if bank transfer is not happening. Is it possible for you to share your number so that i can speak to you sir? Thanks