What is Share Transfer?

Shareholders are the real owners of the company, and they appoint Directors to manage the affairs of the company. Shares of company held by shareholders are movable property and freely transferable to other person or entity. As the number of shares decides the percentage of ownership by the shareholder, transferring of shares leads to transferring of ownership by a shareholder.

Transferability of shares of a private company is indeed restricted as mentioned in their Articles of Association because of protection of rights of the small group of investors. While shares of the public company are freely transferable.

Provisions relating to Stamp Duty

As per Companies Act, 2013 transferability of shares should be duly stamped, and stamp duty is paid by the seller of the shares.

Finally, every company, unless prohibited, shall issue within one-month certificates of shares transferred after the application for the registration of transfer of such shares is received.

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