Transfer Of Shares

Transfer of shares is an important corporate procedure that allows shareholders to sell or transfer their ownership rights to another person. It is a voluntary transaction where the existing shareholder (called the Transferor) transfers their shares to another individual or entity (called the Transferee). The transfer is generally executed through a Securities Transfer Form (Form SH-4), which must be properly filled, signed by both parties, and submitted to the company along with the original share certificate. Once the company verifies the documents and the Board of Directors approves the request, the company records the new shareholder’s details in the Register of Members. In public companies, share transfers can be completed quickly through Demat accounts and stock exchange mechanisms. However, in private limited companies, the transfer process may involve additional approval requirements as per the Articles of Association (AoA). These provisions often allow existing shareholders to get the first opportunity to purchase the shares before they are offered to an external buyer.