Time limit to approve share transfer

Others 1457 views 5 replies

 

Can anyone tell me the time limit within which the company has to approve the share transfer i.e. the board of directors has to approve the transfer by passing a board resolution, after the transfer deed is presented to the company after execution?

 

Suppose the date of stamping on the share transfer deed is 2nd January. The transferor and transferee executed the share transfer deed and mentioned the date as 11th February.  The transferee delivered the duly executed transfer deed to the company on 27th February. Then, what should be the maximum time limit within which the company should pass board resolution for recording the transfer and deliver the duly share certificates duly signed to the transferee?

The company in question is a private limited company.

Replies (5)

 

In private company, the Articles provides for the process and time for transfer in details. Company has to go by the articles of the company.

 

If the transfer deed is of 2nd January then (for private company) it remains valid for 2 months i.e 2nd March, 2013

Sneha, does it mean that the company has to approve the share transfer on or before 2nd March by passing a board resolution? Please elaborate.

The article is silent on the issue. 

Share transfer deed will be valid only for 2 months (1yr in case of public company). Since Company has received it on 27th Feb. u can pass resolution by circulation for approval of such transfer by 2nd March, 2013. The Board will take note of the same in the next BM. 

Thanks for the reply. Just out of curiousity, I would like to know what would have happened had the company received the duly executed transfer deed on the last day i.e. 2nd March, with no time to call board meeting or pass a resolution by circulation?

According to my perception, in that case Co can very well deny to register such transfer on the ground that share transfer deed has become invalid.


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