Share Transfer
What is Share Transfer?
Share Transfer is the process of transferring ownership of shares from one shareholder to another in a company.
It is governed by the Companies Act, 2013, the Articles of Association (AOA) of the company, and applicable SEBI / regulatory guidelines (for listed companies).
📌 Share transfer may happen due to sale, gift, inheritance, or business restructuring.
Why Transfer Shares?
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Sale of shares to a new investor
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Transfer among family members
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Exit of a shareholder
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Business restructuring or merger
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Fulfillment of buy-back or shareholder agreement clauses
Who Can Apply for Share Transfer?
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Current shareholder (Transferor)
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New shareholder (Transferee)
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Company’s Board of Directors (approval required)
Documents Required
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Share Transfer Deed (Form SH-4)
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Share Certificate(s) to be transferred
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Board Resolution approving the transfer
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KYC of transferee (PAN, Aadhaar, address proof)
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Acknowledgment of receipt of consideration (if shares are sold)
Process of Share Transfer
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Prepare Share Transfer Deed (Form SH-4) – Signed by transferor and transferee
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Submit Share Certificate and Deed to Company – Company reviews for compliance
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Board Meeting – Approve share transfer
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Update Register of Members – Record new shareholder
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Issue New Share Certificate – To the transferee
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File Forms with MCA – If authorized capital or significant shareholding changes occur
⏱️ Timeline: 7–15 working days (company internal processing)
Important Points
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Private companies may have restrictions under AOA (right of first refusal, approval required)
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Shares cannot be transferred until the company approves
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Stamp duty on share transfer varies by state
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Listed companies follow SEBI rules for share transfer
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Updating MCA records (Form MGT-7 / SH-7) may be required if significant shareholding changes occur
Benefits of Share Transfer
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Enables change in ownership or exit strategy
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Compliance with Companies Act and shareholder agreements
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Smooth business succession or restructuring
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Legal proof of ownership for new shareholders
