What is Transfer of Shares? Briefly outline the procedure for Transfer of Shares.

Transfer of shares means the transfer of ownership of the shares from one person to another. Transfer of shares is effected by removing the name of the existing shareholder from the register of members and by inserting the name of the transferee in place of the transferor in the register of members. Shares of a public company are freely transferable whereas there are certain restrictions on the transfer of shares of a private company.

Procedure for Transfer of Shares

The instrument of transfer should be duly filled and signed by both the transferor and the transferee.

The instrument of transfer must be in the form prescribed by the Government.

Every instrument of transfer must bear the stamps of the requisite value as per the Indian Stamps Act,

The instrument of transfer must be delivered to the company for registration within 60 days from the date of execution along with the share certificate or the letter of allotment, as the case may be.

If partly paid -up shares are to be transferred, then the company must give notice to the transferee and if the transferee does not make any
objection within two weeks from the date of receipt of the notice, the company can register the transfer.

After all the above steps have been duly complied with, Board of Directors approval for the registration of transfer is obtained. After the approval of the Board, the company registers the transfer by striking off the transferor’s name from the Register of Members and entering the name of the transferee in its place.