Form SH-4 : Share Transfer

The Form SH-4 indicates that the transferor wants to transfer the given securities to the transferee. Transfer of shares is the voluntary handing over of the rights and possibly, the duties of a member (as represented in a share of the company). These rights and duties are handed over from a shareholder who wishes to not be a member of the company any more to a person who wishes of becoming a member. Thus, shares in a company are transferable like any other movable property in the absence of any expressed restrictions under the articles of the company.

Additionally, it indicates that both the parties involved willingly accept the conditions of the transfer. There are various different individuals involved in the transfer. They are as follows:

  1. Subscribers to the memorandum
  2. Legal Representatives, in case of deceased
  3. Transferor
  4. Transferee
  5. Company (Listed/Unlisted)

Sample – Draft Form SH-4

The first step in the procedure for Share Transfer is to obtain the Transfer deed in the prescribed Form SH-4. Revenue Stamps amounting to 0.25% of the consideration of the transfer are to be affixed on the Form SH-4. The instrument of transfer may not be in the prescribed form (Form SH-4) in the following cases:-

  • Where a director or nominee transfers shares on behalf of another body corporate under section 187 of the Companies Act, 2013;
  • Where a director or nominee transfers shares on behalf of a corporation owned or controlled by the central or state Government;
  • For transferring debentures, a standard format can be used as the instrument of transfer.
Draft Form SH-4
Draft Form SH-4
Download
Draft Form SH-4
Draft Form SH-4
Download

FAQs

What is the ledger folio number in the share certificate?

The ledger folio number is allotted to each shareholder of the company, whereas the share certificate is issued after each allotment. For Example – If further shares are allotted to existing shareholders, the ledger folio will remain the same but the share certificate numbers will not be the same.

What is the stamp duty on share transfer?

The stamp duty applicable on share transfer is at 0.25% on the market value on the date of execution of the transfer deed or consideration value whichever is higher. One can contact the nearest “General Post Office” for Share Transfer Stamps or getting Transfer deeds stamped.

How do I change the name on a share certificate?

Prepare a letter addressing the Company or the RTA of the Company mentioning the reason for your name change and clear details of your new name. Furthermore, enclose the attested copy proofs of name change i.e Affidavit, PAN card, etc. Also, enclose the original share certificate along with the letter.

Got Questions? Ask Away!

  1. Hey @Sofiyah_Valiante

    Transfer of shares is a voluntary activity whereas transmission of shares takes place at the time of death of the share holder or when the share holder becomes insolvent/ lunatic.

    Hope this helps!