Share Transfer &
Transmission Service
Complete Documentation

Share transfer starts with AGREEMENT between seller (transferor) and buyer (transferee). Key Points: (1) NEGOTIATION: Parties agree on: (a) NUMBER OF SHARES to be transferred, (b) PRICE PER SHARE (consideration), (c) TOTAL CONSIDERATION (number of shares × price), (d) PAYMENT TERMS (advance, balance, installments), (e) TRANSFER DATE. (2) SHARE PURCHASE AGREEMENT (SPA): For significant transfers (majority stake, controlling interest), parties execute detailed SPA containing: (a) Representations and warranties (shares are free from encumbrance, no pending litigation), (b) Conditions precedent (board approval, regulatory approvals), (c) Closing mechanism (payment → transfer), (d) Indemnities (if any misrepresentation). (3) For GIFT: Execute GIFT DEED stating: 'I [Transferor] hereby gift [X] shares to [Transferee] without any consideration out of natural love and affection.' Attach affidavit confirming no consideration. (4) PAYMENT: Transferee pays consideration to transferor (bank transfer/cheque). Keep payment proof (NEFT screenshot, cheque copy, bank statement) — required for: (a) Stamp duty calculation, (b) Capital gains tax filing by transferor, (c) Income tax verification. Taxvio provides SHARE PURCHASE AGREEMENT TEMPLATE and GIFT DEED FORMAT for different scenarios.

For PRIVATE LIMITED COMPANIES, check if AOA contains PRE-EMPTION CLAUSE (Right of First Refusal). Pre-emption Process: (1) Transferor must FIRST OFFER shares to EXISTING SHAREHOLDERS at same price. (2) Transferor sends OFFER LETTER to all existing shareholders: 'I intend to sell [X] shares at ₹[Y] per share to [Transferee]. You have RIGHT OF FIRST REFUSAL to purchase these shares at same price within 15 days.' (3) If existing shareholder(s) ACCEPT: Shares must be sold to them (not to original transferee). Process restarts with new buyer. (4) If existing shareholders REFUSE: They issue NO OBJECTION CERTIFICATE (NOC): 'I [Shareholder Name] have no objection to transfer of [X] shares by [Transferor] to [Transferee] at ₹[Y] per share. I waive my pre-emption rights.' (5) After receiving NOC from ALL existing shareholders, transferor can proceed with transfer to original transferee. IMPORTANT: If AOA is SILENT on pre-emption, no NOC required (transfer can proceed directly). PUBLIC LIMITED COMPANIES: No pre-emption (shares are freely transferable). Taxvio reviews AOA, drafts offer letter, coordinates NOC collection from existing shareholders.

Prepare SHARE TRANSFER DEED in prescribed format (Form SH-4 under Rule 11). Form SH-4 Contents: (1) PART 1 - Details of Company: CIN, Name, Registered office address. (2) PART 2 - Details of Transferor (Seller): (a) Name, Father's name/Spouse name, (b) Address, (c) PAN, Aadhaar, Email, Mobile, (d) Folio number (shareholder ID in company records), (e) Number of shares held, (f) Distinctive numbers of shares being transferred (e.g., 'Share Nos. 1001 to 1500'), (g) Certificate number(s) of shares being transferred. (3) PART 3 - Details of Transferee (Buyer): (a) Name, Father's name/Spouse name, (b) Address, (c) PAN, Aadhaar, Email, Mobile, (d) Occupation, (e) Whether existing shareholder or new shareholder. (4) PART 4 - Consideration: (a) Total consideration paid (in ₹), (b) Mode of payment (cheque/NEFT/cash), (c) Date of payment. (5) PART 5 - Signatures: (a) TRANSFEROR's signature (with date), (b) TRANSFEREE's signature (with date), (c) Witness signatures (2 witnesses — name, address, signature). (6) STAMP DUTY: Form SH-4 must be STAMPED before submission: (a) Calculate stamp duty: 0.25% to 0.5% of consideration (as per state laws), (b) Pay stamp duty via e-stamping (www.shcilestamp.com), (c) Print Form SH-4 on stamp paper OR attach e-stamp certificate. Example: Transfer of 500 shares at ₹100/share = ₹50,000 consideration. Stamp duty (0.25%) = ₹125. Purchase e-stamp of ₹125 and attach. Taxvio prepares Form SH-4 with accurate details, calculates stamp duty, coordinates e-stamping, and ensures proper execution.

Submit transfer application to company for BOARD APPROVAL. Documents to Submit: (1) DULY EXECUTED Form SH-4 (stamped, signed by both parties, witnessed). (2) ORIGINAL SHARE CERTIFICATES (physical certificates issued by company) — to be surrendered by transferor. If certificates LOST: Execute INDEMNITY BOND + publish loss advertisement in newspaper + apply for duplicate certificates. (3) CONSIDERATION PROOF: Bank statement/NEFT screenshot/cheque copy showing payment. If GIFT: Gift deed + affidavit stating no consideration. (4) NOC FROM EXISTING SHAREHOLDERS (if pre-emption rights applicable). (5) PAN CARD copies of transferor and transferee (mandatory for KYC). (6) AADHAAR CARD copies (for identity verification). (7) BOARD RESOLUTION (if transferee is a company): Authorizing company to purchase shares. Submission Process: (1) Transferor or transferee submits above documents to company's registered office. (2) Company acknowledges receipt and issues RECEIPT with date stamp. (3) Company places transfer application before BOARD OF DIRECTORS for approval (within 30 days of receipt). Taxvio compiles all documents, coordinates with transferor/transferee, and submits to company on your behalf.

Company convenes BOARD MEETING to approve/reject share transfer. Board Meeting Process: (1) NOTICE: Company secretary issues notice to all directors (minimum 7 days before meeting). (2) AGENDA: 'Approval of share transfer from [Transferor] to [Transferee] — [X] shares at ₹[Y] per share.' (3) BOARD DELIBERATION: Directors review: (a) Whether transfer complies with AOA provisions, (b) Whether transferee is 'fit and proper' person (if AOA allows discretion), (c) Whether pre-emption rights were followed, (d) Whether all documents are in order, (e) Whether stamp duty paid. (4) BOARD RESOLUTION: If directors APPROVE: 'RESOLVED THAT the transfer of [X] equity shares bearing distinctive numbers [XX to YY] from [Transferor] to [Transferee] for a consideration of ₹[ZZ] be and is hereby approved. RESOLVED FURTHER THAT the Register of Members be updated accordingly and new share certificate(s) be issued to [Transferee].' If directors REJECT: Board can reject transfer WITHOUT assigning reason (if AOA allows). Transfer deed returned to applicant. (5) MINUTES: Company secretary prepares MINUTES OF BOARD MEETING documenting approval. IMPORTANT: Board CANNOT delay decision beyond 30 DAYS of application. If board doesn't approve/reject within 30 days, transfer is deemed APPROVED automatically (Section 58(4)). Taxvio provides BOARD RESOLUTION TEMPLATE and assists company secretary with board meeting coordination.

After board approval, company REGISTERS transfer in its records. Registration Process: (1) UPDATE REGISTER OF MEMBERS (Section 88): (a) Strike off transferor's name and shareholding, (b) Add transferee's name and shareholding, (c) Record: Date of transfer, Number of shares transferred, Distinctive numbers, Folio number (new folio for transferee if not existing shareholder). (2) CANCEL OLD SHARE CERTIFICATES: Stamp old certificates (surrendered by transferor) as 'CANCELLED — Shares transferred to [Transferee] on [Date]'. Preserve cancelled certificates in company records (required for audit). (3) ISSUE NEW SHARE CERTIFICATES: Print new share certificates in transferee's name: Certificate No.: [New number], Distinctive Nos.: [XX to YY], Number of shares: [X], Name of shareholder: [Transferee], Date of issue: [Transfer registration date]. Certificates must be signed by: (a) 2 Directors (or 1 Director + Company Secretary), (b) Common seal of company affixed. (4) DELIVER NEW CERTIFICATES: Hand over new certificates to transferee (in person or registered post). Obtain acknowledgment. (5) UPDATE SHARE CAPITAL STATEMENT: No change in total share capital (transfer doesn't create/cancel shares), but update shareholder distribution for compliance reports. Timeline: New certificates must be issued within 30 DAYS of board approval (or 2 months from transfer application date). Taxvio assists with register updates, certificate printing, and delivery to transferee.

For certain types of transfers, intimation to regulatory authorities is required. Regulatory Intimations: (1) FOR LISTED COMPANIES (SEBI regulations): Transfer of shares by promoters/directors/KMP must be intimated to stock exchange within 2 trading days (via disclosure portal). (2) FOR FOREIGN INVESTMENT (FEMA regulations): If transferee is FOREIGN INVESTOR (NRI, FPI, foreign company), transfer must comply with FEMA (Foreign Exchange Management Act). Process: (a) File Form FC-TRS with RBI within 60 days (if transfer results in downstream investment change), (b) Obtain FIRC (Foreign Inward Remittance Certificate) if consideration paid from abroad, (c) Ensure transfer doesn't violate sectoral caps (e.g., retail, agriculture, real estate have FDI restrictions). (3) FOR STARTUPS (DPIIT recognition): Startups must report ownership changes in annual returns to DPIIT (for maintaining recognition benefits). (4) FOR NBFC/BANKING COMPANIES: Transfer of significant stake (>5% or >26%) requires RBI approval (prior permission under Banking Regulation Act/RBI Act). Most PRIVATE LIMITED COMPANIES: No regulatory intimation required (only internal documentation). Taxvio verifies regulatory applicability and handles intimations if required.

After transfer is complete, maintain proper records and file tax returns. Post-Transfer Requirements: (1) TRANSFEROR (Seller) TAX COMPLIANCE: Transfer of shares is CAPITAL ASSET sale → Capital gains tax applicable. (a) If shares held >24 months: LONG-TERM capital gains (LTCG) @ 10% (if gains >₹1 lakh/year). (b) If shares held <24 months: SHORT-TERM capital gains (STCG) @ 15% (for listed) or slab rate (for unlisted). (c) File ITR (Income Tax Return) for the year disclosing capital gains. (d) Provide Form 16A to transferee (TDS certificate if TDS deducted). (2) TRANSFEREE (Buyer) COMPLIANCE: (a) Cost of acquisition = Consideration paid (for future capital gains calculation when transferee sells). (b) Keep transfer deed, payment proof, share certificates safely. (c) If transferee is COMPANY: Disclose investment in balance sheet under 'Investments'. (3) COMPANY COMPLIANCE: (a) Preserve transfer documents for minimum 8 years (as per Companies Act record retention rules), (b) Update annual return (Form MGT-7) with updated shareholding pattern, (c) Update ownership details in income tax portal (if company is startup claiming tax exemptions). (4) REGISTER MAINTENANCE: Keep Register of Members updated at all times (digital or physical). Register is EVIDENCE of ownership — must be accurate. Taxvio provides POST-TRANSFER COMPLIANCE CHECKLIST and reminds transferor about capital gains tax filing deadlines.