{"id":36485,"date":"2025-03-28T11:24:44","date_gmt":"2025-03-28T05:54:44","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/learn\/?p=36485"},"modified":"2026-04-09T14:16:14","modified_gmt":"2026-04-09T08:46:14","slug":"share-transfer-deed-format","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/share-transfer-deed-format\/","title":{"rendered":"Share Transfer Deed Format"},"content":{"rendered":"

A company sometimes needs to alter the way its shares are structured, such as by bringing in new shareholders or redistributing existing shares among current shareholders, as part of a corporate\u2002restructuring. One common way that happens is through a share transfer, which is when shares are sold\u2002or gifted from one person to another.<\/p>\n

Share Transfer with Draft Documents: Companies Act, 2013<\/h2>\n

1. Transferability of Shares in a Company<\/h3>\n

Typically, a company\u2019s securities, whether shares or others, are transferable. However, for private companies, the transfer of shares is regulated by the company\u2019s Articles of Association; understanding how to issue shares in a private limited company<\/a> is equally important before initiating any transfer.\u00a0The process of transferring shares is governed by the Companies Act of 2013 of India for both public and private companies.<\/p>\n

2. Legal Process for Share Transfers<\/h3>\n

To legally transfer shares, you have to fill out a share transfer form (Form SH-4). For a detailed walkthrough, refer to our guide on how to transfer shares in a private limited company<\/strong><\/a>. An important characteristic of company securities is transferability. Shares, debentures, or other\u2002interests in a company are to be treated as movable property and are transferable in the manner laid down in the Articles of Association of the company in terms of Section 44 of the Companies Act, 2013. Most public company securities are transferable, but private companies impose restrictions to protect shareholders and other holders of\u2002security interests.<\/p>\n

3. Requirements for Registering Share Transfers (Section 56)<\/h3>\n

According to Section 56 of the Companies Act, 2013, the transfer of shares and securities shall be registered by a company only after the submission of a valid share transfer Form (SH-4). For a better understanding of MCA form requirements<\/strong><\/a>, you may refer to our detailed overview. The form should be stamped, dated & signed by\u2002both the Transferor & Transferee. It should be submitted along with the share certificate or proof of allotment (see the allotment of shares procedure<\/a> for reference) to the company within sixty days of the agreement to transfer shares. In the case of partly paid shares, if the shares are not fully paid, the company shall not register the transfer before issuing a notice to the buyer\u2002(Form SH-5) for such transfer and the payment of consideration within 2 weeks of the notice to the buyer and obtaining a No Objection Letter.<\/p>\n

4. Private Company Share Transfer Restrictions<\/h3>\n

Restrictions on Share Transfers Private companies often impose restrictions on the ability to\u2002transfer shares so that the owners can maintain control over who can own shares of the private company. The shareholder who wants to transfer shares must\u2002comply with a procedure to give effect to these restrictions. Below are the steps involved:<\/p>\n

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  1. To transfer shares, the shareholder must first notify the company\u2002of the intention to transfer. This notice calls for the offer of shares to\u2002existing shareholders (as detailed within the company\u2019s Articles of Association). (Refer to Annexure \u2014 A for an indicative format.)<\/li>\n
  2. After the notice is received, the request will be reviewed by the company\u2019s Board of Directors at a meeting, as part of the company\u2019s broader private limited company compliance<\/strong><\/a> obligations. The notice will be given to all existing shareholders announcing an offer to acquire the shares. The notice will be given to\u2002all existing shareholders announcing an offer to acquire the shares. (Appendix B)\u2002This is a sample notice.<\/li>\n
  3. If there is no interest from existing shareholders to purchase the shares, the company will notify the shareholder who wants to sell that\u2002they can now offer to sell the shares to an outside (non-member) buyer. (Sample letter\u2002at Annexure-C.<\/li>\n
  4. The shareholder may then deliver the duly executed Share Transfer Deed (Form SH-4) to the company. This step is also part of a company\u2019s ongoing annual compliance obligations<\/strong><\/a> that every private limited company must maintain. [Refer to Share\u2002Transfer Form in Annexure-D]<\/li>\n<\/ol>\n

    Documentation Required<\/h2>\n