A company's shares are movable property and are freely transferable in general. Share transfer means the voluntary transfer of rights and probably the duties of a member (as reflected in the company's shareholding) from a shareholder who wishes to no longer be a member of the company to an individual who wishes to become a member of the company.

Section 56 of the Companies Act, 2013 provides that the transfer of the company's shares and other assets will be reported by the company only if an effective instrument for the transfer of shares (share transfer form) has been submitted in compliance with the requirements of Form No. SH of 4. For the transfer of securities, the form sh 4 must be duly stamped, of appropriate value, dated and executed by or on behalf of the transferor and the transferor. For private Companies, the form need not be filled as the process of transfer of shares is governed by the companies articles according to Section 44 of the Companies Act. Form SH-4, along with a share transfer certificate or certificate relating to securities, is expected to be submitted to the corporation by the transferor or transferee of the shares within sixty days after the date of execution of the share transfer agreement. In the absence of such a certificate for the transfer of shares, the application for the transfer of shares must be submitted along with the letter of allocation of securities. A business shall not register a transfer of partly paid shares unless the company has given the purchaser notice in Form SH-5 and no objection has been received from the purchaser within two weeks of receipt of the notice.

All certificates of transferred securities should be delivered by a company within one month from the date of receipt by the company of the instrument of the transfer unless the company is prohibited from delivering the instrument of transfer based on an order of the Court or a direction from another authority.

Under the Indian Stamp Act and the notice of stamp duties in force in the state concerned, stamps should be required for the transfer deed. For each one hundred rupees of the value of the share or part thereof, the current stamp duty rate for the transfer of shares is 25 paise. That means the stamp duty for shares valued at Rs. 1050 would be Rs. 2.75. When all the formalities such as the execution of the transfer deed and handing over of the share certificates are complete, a transfer is complete.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.