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Shruthi MP (Assiatant Manager-Legal)     08 June 2009

Share transfer

A person “X” holds about 1000 shares in a company. Now X is going to transfer his shares to another person Y.

 X has paid the company for the shares but has not received the shares from the company. In the interim time, he decided to sell the shares and writes to the company to transfer the shares to Y  directly. Is this possible. If yes, then what kind of agreement should be with the company, person X and person Y


 8 Replies

Shruthi MP (Assiatant Manager-Legal)     08 June 2009

its urgent!!!!!!!


 Company must have issued Certificate (if 3 months lapsed). 

Otherwise, i think u should first get the Certificate and should then go for transer. Because a Transfer Deed will ask for Certificate details.

I think there should b a way out for Transfer in Private Company but i dont have any idea. 

Plz wait for the views of other learned professionals.


Shruthi MP (Assiatant Manager-Legal)     08 June 2009

hey thanks nirav


 Most welcome..........Regards,

mohansreddy (Advocate)     08 June 2009

Till the certificate is issued in your name you cant request/direct the company to transfer the shares in the name you suggest. one more thing check the byelaws of the company, is there any limitation for transfer of shares

hemant gupta (service)     09 June 2009

By simply writing a letter, it is not possible for the company to transfer the shares. As per the provisions of the companies act 1956 for effecting a transfer the shares certificate alongwith a duly executed trasfer deed by the transferor and transfere should be lodged with the company . There is the requirement of the stamp duty to be paid on that, for this share transfer stamps needs to be affixed on the back of the transfer deed. At present in Delhi the stamp duty for the purpose is .25% of the consideration involved.

X should write to the company to relese the share certificate as he has paid the full money on that i.e. his shares are fully paid up. There is no need for any separate agreement for the same with the company. Hope this satisfy your query



Shruthi MP (Assiatant Manager-Legal)     09 June 2009

hey thank you all

J Manivannan (Advocate & Consultant)     25 June 2009

1.First, The Share Certificate should be issued in the name of  X

2. Then, Excecute share transfer form ( Form No.7B) with appropriate stam duty in favour of B.(Both Transferor and Transferee should be sign in form-7B)

3. Said Transfer should be approved by board resolution

At present stamp duty 0.25% on total consideration.


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