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PROCEDURE FOR TRANSFER OF SHARES?



For transfer of all shares included in one share certificate:

1.        Receiving the instrument of transfer: The instrument of transfer is a prescribed transfer form. This form is available at the registered office of the company or at the broker’s office. The form contains the information of the transferor and transferee. This form is to be filled properly signed by the transferor and transferee. The form i.e. instrument of transfer is to be stamped by the Registrar of Companies. The secretary receives the instrument along with the share certificates and necessary transfer fee.

2.       Scrutiny of the instrument: - After receiving the instrument, the secretary scrutinizes it. The secretary mainly checks:
Ø  Whether the entries made in the instrument are correct, Instrument is duly stamped and signed, Instrument is properly endorsed (approved), and Stamp duty is paid.

3.       Issuing transfer receipt: -If the secretary finds that all the entries in transfer instrument are correct, he issues a temporary receipt, which is known as “Transfer Receipt

4.       Notice of Lodgement: -The secretary sends a notice of lodgement to the transferor and transferee. The notice states that the instrument of transfer has been lodged with the company. The transferor and transferee can convey their objections regarding transfer within two weeks to the company.

5.       Board Meeting: -The secretary arranges the Board meeting to approve the transfer of shares. In the meeting the Board approves or refuses the transfer. For refusal the board has to give a valid reason.

6.       Entries in the Register of transfer: -A secretary then makes entries in the register of transfer.

7.       Entries in the Register of Members: -After entries in the register of transfer, are made, transfer becomes legal and then the entries are made in the Register of members. The name of the transferor is cancelled from the register and the same name of the transferee is entered in his place.

8.       Dispatch of Share Certificate: -After the entries are made in the Register of Members, the secretary makes necessary arrangement to send the shares certificate to the transferee. It is sent at registered address of the transferee.


B.      For transfer of part of the shares included in one share certificate are to be transferred:
This happens when the shareholder wants to transfer only part of the shares. E.g.: if a shareholder is having 1000 shares of a company which are mentioned in one share certificate and he wants to transfer 600 shares and retain 400 shares. In this case transfer is divided into two stages:

·         Certification of transfer stage..................Registration of transfer stage

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