Let us discuss in detail the process followed, the mandatory steps while issuing transfer documents, compliance aspects, and non-compliance aspects.
The Entire Process of Transferring Shares.
Proper Notice by the Transferor
The Regulatory Procedure-
- As per the Indian Stamp Act, there must be a stamp on the transfer deed and the rate of transfer of shares in case of transfer of shares by a Private Limited company.
- Folio Number for both the parties(Transferor and Transferee)
Time Stamp for depositing the Transfer Instrument with the company.
Share Certificate and Letter of Allotment.
Resolution by the Board
- Meeting. After that, the transferee’s name is recorded in the members’ register as their beneficial owner. If all goes according to plan, the board will issue a registration resolution.
Delegating the power of Share Transfer
- Moreover, under Listing Agreements, there are powers where a committee or registrar can work on these transactions at least one time in a fortnight.
Issue of share certificate to the transferee
Transfer of Shares in Case of Private Company: Important Points to Remember
- The gift of shares shall not be termed as non-compliant if certain formalities are not complete.
What if the Shares Get Transferred After the Expiry of 60 Days
Synopsis of the Procedure of Shares
- Transfer Document must be complete in all aspects.
- Signed by both parties(transferor and transferee).
- Time Limits for the deposit of transfer deed
- The duty of the company is to monitor the effect of the transfer of shares. It either accepts or rejects based on the legalities and procedure complexities.
Non-Compliance in Case of Transfer of Shares in Case of Private Company
In the case of a Private Company, any failure to comply with the provisions of share transfer will result in the following penalties: