Transfer shares between shareholders with proper legal documentation. We prepare the Share Transfer Deed (SH-4), handle stamp duty, update the register of members, and ensure full MCA compliance — so the transfer is legally watertight.
A share transfer is the voluntary transfer of ownership of shares from one person (the transferor) to another (the transferee). In a private limited company, shares are not freely tradeable on a stock exchange — they are transferred through a formal process involving a Share Transfer Deed (Form SH-4), board approval, and an update to the company's register of members.
The transferor and transferee execute Form SH-4 — the Share Transfer Deed. This document records the details of the transfer including the number of shares, consideration, and signatures of both parties.
Stamp duty of 0.25% of the consideration value (or fair market value, whichever is higher) is paid on the SH-4 deed. The deed must be stamped before or at the time of execution.
The board of directors reviews the transfer request. For private limited companies, the board has the right to approve or reject the transfer (subject to the Articles of Association). A board resolution is passed approving the transfer.
The company's Register of Members (Form MGT-1) is updated to reflect the new shareholder. The transferor's name is removed and the transferee's name is added for the transferred shares.
A new share certificate is issued to the transferee within 2 months of the board approval. The old share certificate is cancelled and a new one bearing the transferee's name is issued.
Most private limited companies have pre-emption rights in their Articles of Association. This means that before transferring shares to an outsider, the transferor must first offer the shares to existing shareholders at the same price. Only if existing shareholders decline can the shares be transferred to a third party. We review your AOA and guide you through this process.
Stamp duty is payable at 0.25% of the consideration value on the SH-4 Share Transfer Deed. For example, if shares worth ₹10 lakhs are being transferred, the stamp duty would be ₹2,500. This must be paid before the deed is executed.