What does Share Transfer mean?
The real owners of the company are the shareholders who have the authority to appoint its Directors who shall manage the activities and affairs of the company. Shares can be easily transferable to the other person / entity as they are the movable property of the company. Transferring of shares results in transferring of ownership by a shareholder to the person who has purchased such shares.
Shares of a private company cannot be transferred as it against the Articles of Association of the company to protect the rights of the small group of investors on the other hand public companies are free to transfer its shares.
Provisions relating to Stamp Duty
Whenever the shares are transferred, it should be duly stamped according to the Companies Act, 2013 and seller of the shares are required to pay such stamp.
After the application for the registration of transfer of such shares is received by the company, transfer certificate of shares is required to be issued by the company within a period of 1 month.