A share transfer is the process of transferring existing shares from one person to another; either by sale or gift.
Transfer Shares refers to the transfer of shareholding or change in ownership of shares in a company by a person to another person. The person who transfer the shares is called ‘Transferor’ and the person who gets the share transferred is called as ‘Transferee’.
Transfer of shares means the voluntary handing over of the rights and possibly, the duties of a company member (as represented in a share of the company).
Solution. Transfer of share means the transfer of ownership of shares from one person to another. In other words, a shareholder can transfer the share to another shareholder. Transfer of shares takes place when the shareholder wants to sell his shares or give as a gift to another person.
Process of transfer of shares from one Demat account to another
- Step 1 – The investor fills the DIS (Delivery Instruction Slip) and submits it to the current broker.
- Step 2 – The broker forwards the DIS form or request to the depository.
- Step 3 – The Depository will transfer your existing shares to the Demat account.
Any private agreement between the shareholders are not binding either on the company or on the shareholders. Further, share transfer can only be restricted by the Articles of Association. The right to transfer shares of a private limited company cannot be an total prohibition or ban on share transferability.
As they grow, it may be necessary to issue new shares to bring in new investment or change the business structure. Shareholders might also want to transfer their shares – either for business or personal reasons.
So, the transfer of shares in the company is the process of transferring existing shares from one person to another, either by selling or by gifting them. When a person purchases or receives a company’s stock, they get a certificate that shares the details of the ownership of the shares, known as the stock certificate.
Stocks can be given to a recipient as a gift whereby the recipient benefits from any gains in the stock’s price. Gifting stock from an existing brokerage account involves an electronic transfer of the shares to the recipients’ brokerage account.
Cancellation of Stamp by Company is illegal. If once a company transfers shares by mistake even if the instrument was not duly stamped, it can’t then apply for rectification of members.
Private limited companies which are registered with companies house are able to sell, gift or transfer company shares to other individuals. A company share represents a proportion of the business which you own. Having ownership of a share entitles you to a relative proportion of the company profits.
Transfer of shares refers to the transfer of title to shares, voluntarily, by one party to another. Transmission of shares means the transfer of title to shares by the operation of law.
A share transfer agreement is an agreement that transfers the shares from the seller to the purchaser either by sale or gift. It can also be used as a transfer form. A share transfer agreement is signed between two parties.