A transfer of shares means the transfer of ownership. In other words, if we define that shares of a company are a movable property and thus can be transferred like any other property. When a previous shareholder transfers the issued shares to the other person who is registered as the holder of those shares. This whole process is known as the transfer of shares.
A Public Company can freely transfer its shares as compared to the private limited company because they issue some restrictions at the time of transfer of shares.
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Documents Required for Transfer of Shares
These are some required documents mandatory for transfer of shares like;
- Original Share Certificate of share to be transferred.
- Certificate of Stamp duty payment (Franking) on issue of share certificate.
- Valuation and the share transfer agreement.
- Share transfer form duly signed by the parties.
- ID and address proof of the transferor and transferee.
- Proof of payment of consideration of transfer if any.
Process of Transfer of Share Process
There are some steps in the process of transfer of shares like;
- Notice of intention to transfer shares.
- Documentation for transfer of shares.
- Transferor send the share transfer form and certificate to company.
- Issue of fresh share certificate by the company.
Instead of issue new shares, previous shares can be transferred to new recipients, either for business or personal reasons. To bring them on board shareholders may decide to withdraw some of their shares and transfer them to a new business partner. And, if a shareholder wants to transfer either some or all of their shares to their spouse or family members a gift then they can do it. Shares can be sold in return for cash or other assets alternatively.