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Share Transfer of a Private Company Online

A share transfer in a private company is made on Form SH-4, duly stamped and signed by the seller and the buyer, and delivered to the company with the share certificate within 60 days of signing (section 56 of the Companies Act, 2013). The company then registers the transfer or, if its Articles allow, refuses it with written reasons within 30 days.

How a share transfer works and the law behind it

Under section 56(1) of the Companies Act, 2013 a company cannot register a transfer of shares unless a proper instrument of transfer, duly stamped and signed by or for the seller and the buyer, is delivered to it with the share certificate within 60 days of its execution. The prescribed form is SH-4 (Rule 11(1) of the Companies (Share Capital and Debentures) Rules, 2014). If the instrument is lost or reaches the company late, the company may still register the transfer on an indemnity the Board thinks fit (proviso to section 56(1)). For partly paid shares, if only the seller applies, the company must notify the buyer and may register only if the buyer does not object within two weeks (section 56(3)). Under section 56(4) the company delivers the certificates within one month of receiving the instrument.

Who is involved, and what is not a share transfer

The transferor and the transferee: The seller or donor, and the buyer or donee. Both sign Form SH-4.

  • The transferor and the transferee
  • The company
  • Not a transfer: fresh allotment
  • Not a transfer: transmission on death
  • Not SH-4: transfers between demat accounts
  • A non-resident party

How a transfer is completed

Stamp duty and fees

Stamp duty depends on the price and the kind of transfer, and it does not change from State to State. We confirm the exact amount before the deed is signed.

  • Stamp duty on Form SH-4: A small fraction of the price, set by a central law
  • Fee to the Ministry of Corporate Affairs: None
  • StampMitra professional fee: From ₹3,999 + GST for a plain transfer

Documents you need

A foreign transferee needs further foreign exchange documents; we confirm the list before the transfer is signed.

  • Form SH-4 signed by the transferor and the transferee, with a witness
  • Original share certificate
  • Proof of stamp duty, such as the e-stamp
  • Transferee's PAN and KYC
  • Board resolution approving the transfer
  • Members' consent, if the Articles require pre-emption or a right of first refusal

Time limits

Stage, Time limit, Basis

  • Deliver Form SH-4 and the certificate to the company: Within 60 days of executing the instrument
  • Company's notice of refusal, with reasons: Within 30 days of the instrument being delivered
  • Company delivers the certificates: Within one month of receiving the instrument
  • Transferee's appeal to the Tribunal: Within 30 days of the refusal notice

Your 60-day delivery date

Enter the day Form SH-4 was executed.

The company's dates

Enter the day the company received Form SH-4.

Consequences of getting it wrong

Default, Consequence

  • Company defaults under section 56: A penalty on the company and on each officer in default (section 56(6)); we confirm the amount against
  • Under-stamped or unstamped instrument: It is not a proper instrument of transfer, so the company cannot register it
  • Not complying with a Tribunal order on a refused transfer: Imprisonment of one to three years and a fine of ₹1 lakh to ₹5 lakh (section

Defects to avoid

Each point follows from a condition in the Act or the rules.

  • Form SH-4 is unstamped or under-stamped.
  • The instrument reaches the company after the 60 days. The company may still register it on an indemnity the Board accepts, so day 61 is not
  • The share certificate is missing and no indemnity is offered.
  • A pre-emption or first-refusal clause in the Articles is ignored.
  • The seller's shares are not in demat form where Rule 9B(4) requires it.

What StampMitra does for you

Draft and stamp Form SH-4: We draft the transfer form and arrange the stamping.

  • Draft and stamp Form SH-4
  • Board resolution drafting
  • Update the Register of Members
  • New share certificate

How it works

  1. Check the Articles Look for pre-emption rights or a power to refuse.
  2. Agree the price Offer the shares to members first if the Articles require it.
  3. Execute Form SH-4 Sign it on stamp paper or an e-stamp, with a witness.
  4. Deliver it to the company Deliver Form SH-4 and the certificate within 60 days.
  5. Company registers the transfer The company updates the Register of Members and issues new certificates within one month.

Frequently asked questions

Is Form SH-4 filed with the Registrar of Companies?

No. It is lodged with the company, together with the share certificate.

What is the time limit to deliver the instrument?

60 days from the date the instrument is executed (section 56(1)).

Can a private company refuse to register a transfer?

Yes, but only if its Articles allow it, and it must give written reasons to both parties within 30 days of the instrument being delivered (section 58(1)).

Can the buyer challenge a refusal?

Yes. The transferee can appeal to the Tribunal within 30 days of the refusal notice (section 58(3)).

How much stamp duty is payable?

It is a small fraction of the price, set by a central law, so it is the same in every State. We confirm the amount before the deed is signed. An under-stamped instrument cannot be registered.

What if the share certificate is lost?

The company may register the transfer on an indemnity in place of the certificate. The same applies if the instrument is lost or reaches the company late.

Must the shares be in demat form?

For a private company that is not a small company (paid-up capital up to ₹10 crore and turnover up to ₹100 crore, and not a holding or subsidiary company, is small), the seller must hold the shares in demat form before transferring them (Rule 9B(4)). See our Demat of Shares page.

What about partly paid shares?

A notice in Form SH-5 is needed in addition to Form SH-4. If only the seller applies, the company must notify the buyer and wait two weeks for an objection (section 56(3)).

When does the company issue the new certificates?

Within one month of receiving the instrument (section 56(4)).

Is a transfer between demat accounts done on Form SH-4?

No. Those transfers are executed through the depository.

Is the transfer on a death the same?

No. Transmission on death follows section 56(2) and needs different documents.