PROCEDURE/STEPS
TO BE FOLLOWED BY THE COMPANY WITH REGARD TO TRANSFER OF SHARES REGISTRATION
OF TRANSFER
The company shall register transfer of shares, only when:
Proper Instrument of transfer, has been duly stamped
It has been properly executed b transferor, and transferee Name,
address and occupation of transferee has been delivered to the company.
Share certificate or letter of allotment has been delivered alongwith instrument
of transfer. Central Government has prescribed the form for transfer,
which should be used in the case of all transfers of shares of a company, including
a private company. The form contains the entire particular required.
ACKNOWLEDGE
When, the company received all the requisite documents it generally gives
an acknowledgement for the same. - If the instrument of transfer is received
from a person other than the transferor and the shares are partly paid -up, the
company has to send a notice to the transferee, and it may also send a notice
to the transferor. TIME LIMIT Before effecting any transfer,
the company should ensure that the instrument is lodged within the time limit
as follows: SHARES TRANSFERRED THROUGH A PRESCRIBED FORM SHARES
DEALT IN OR QUOTED ON A STOCK EXCHANGE
Instrument of transfer, alongwith
requisite documents, should be delivered, at any time before the date on which
the register of members in closed, for the first time after the date of the presentation
of the prescribed form before the prescribed authority. Or Within twelve
months from the date of such presentation, whichever is later. IN OTHER
CASE: (i.e. where shares are not quoted on a stock exchange)
In such a
case, within two months from the date of such presentation. The above said
time limit is only where shares are transferred through a "Prescribed form"
SHARES
TRANSFERRED THROUGH UNPRESCRIBED FORM
In such cases, the instrument
of transfer, alongwith documents should be delivered within the expiry of six
months from the date on which the register of members is closed. Such period
as stated above can be extended, by making an application to central government. IF
TRANSFEREE IS MINOR If, transferee is a minor, transfer of shares is
to be effected in accordance with the provisions of the Articles of Association
of the company, where shares to be transferred are fully paid-up, there is no
problem for companies to register the same. In favour of minors through guardian. After
making through scrutiny the officer in charge will put his initial on the form
and the particulars of the transfer instrument will be entered in the Shares Transfer
Register. At periodic intervals, the Share Transfer Register,
alongwith necessary document will be put up before Board or Committee, and they
shall initial the Share Transfer Register for having approved the transfer. The
date of approval of the transfer will be indicated in the register.
Where transfers are duly approved, endorsements will be made on the share certificates
in favour of the transferees and will be certified by company secretary or an
officer authorised by the Board in this behalf. After doing so, the share Certificates
will be returned to the sender alongwith a covering letter. Where new certificates
are to be issued, they have to be issued in conformity with the companies ( issue
of share certificates) Rules, 1960 Finally necessary entries shall
be made in the Register of Members in regard to the transferor and the transferee.
If
the company refuses to register the transfer of shares, it shall send a notice
intimating the refusal to the transferor and transferee. - On entry
of the transferee's name in "Register of Members", he becomes entitled
to dividend and other bonus or share in surplus, as may be declared.
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