Overview
Section 56, Companies ActShare Transfer is governed by Section 56 of the Companies Act, 2013and involves the transfer of ownership from a transferor (seller) to a transferee (buyer). The process requires executing a Share Transfer Deed (Form SH-4), paying applicable stamp duty, obtaining Board approval within 60 days, and updating the Register of Members. Proper compliance ensures legal validity and prevents future disputes.
Legal Ownership Transfer
Securely transfer shareholding rights with documented proof
Board Approval Process
Ensure timely approval within statutory 60-day timeline
Register Updates
Update Register of Members & issue new share certificates
Eligibility Criteria
Registered Shareholder
Transferor must be the legal owner of shares being transferred
Valid Transferee
Individual, Body Corporate, HUF, or Trust eligible to hold shares
AoA Compliance
Transfer must adhere to restrictions (if any) in Articles of Association
No Lien on Shares
Shares should not be under company lien or pledged without consent
Unsure about AoA restrictions? Get free document review.
Required Documents
Share Transfer Deed (SH-4)
Duly stamped & signed by both transferor & transferee
Original Share Certificate
To be cancelled & replaced with new certificate
Board Resolution
Approving the transfer within 60 days of receipt
KYC of Both Parties
PAN, Aadhaar, Address proof of transferor & transferee
Stamp Duty Proof
Payment receipt as per state stamp act rates
No Objection Certificate
If shares are pledged or subject to any lien
Pro tip: Stamp duty rates vary by state — ensure correct payment to avoid rejection.
Share Transfer Process
~7-15 daysDeed Preparation
1-2 daysDraft Share Transfer Deed (SH-4) & calculate stamp duty
Execution & Stamp Duty
1-2 daysSign deed by transferor & transferee; pay stamp duty
Board Approval
3-5 daysConvene Board Meeting to approve transfer within 60 days
Certificate Issuance
2-3 daysUpdate Register of Members & issue new share certificates
Why Professional Share Transfer?
Ensure legally valid ownership changes while avoiding compliance pitfalls.
Legal Validity
Properly executed deeds prevent future ownership disputes
Statutory Compliance
Adhere to 60-day Board approval & certificate issuance timelines
Accurate Records
Update Register of Members & MCA records correctly
Tax Documentation
Proper paperwork supports capital gains tax calculations
Frequently Asked Questions
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Free SH-4 deed drafting included
Download Share Transfer Guide
Get our 10-page handbook: SH-4 filling guide, stamp duty calculator & Board resolution template.