Share Transfer & Allotment

Transfer of shares in a company (as distinct from a fresh allotment) is governed by section 56 of the Companies Act, 2013.

Section 56(1) requires that a company shall not register a transfer of securities unless a proper instrument of transfer, in Form SH-4, duly stamped, dated, and executed by or on behalf of the transferor and transferee, is delivered to the company within the prescribed period (60 days from the date of execution), along with the share certificate or allotment letter. Form SH-4 must be used for a transfer of shares/debentures — it is a private instrument executed between transferor and transferee and lodged with the company, not a filing made with the Registrar of Companies.

On receipt of a valid Form SH-4, the Board (or a duly authorised committee) approves the transfer and the company updates its Register of Members under section 88, issuing a fresh share certificate to the transferee within one month of receipt of the instrument, per section 56(4).

Note: Form SH-4 (section 56) governs share transfer and must not be confused with Form SH-7, which is an unrelated filing made with the Registrar under section 64 to notify alteration of a company's authorised share capital.

Allotment of new shares (as opposed to transfer of existing shares) follows a separate process under sections 39/42/62 as applicable, with the allotment reported to the Registrar in Form PAS-3 within 30 days.

This service covers preparation of Form SH-4, drafting of the Board resolution approving the transfer, updating of the Register of Members, and issuance of the fresh share certificate — or, where the transaction is a fresh allotment, preparation and filing of Form PAS-3.

Share transfer services cover the transfer and the allotment of the shares of a private company under the Companies Act 2013 — the transfer of the shares in Form SH-4 with the board approval and the registration of the transfer, the allotment of the new shares in Form PAS-3 with the board and the members' approvals under Section 62, the stamp duty on the transfer, the updated register of members and the cap table, and the share certificates. The transfer and the allotment are the mechanics through which the company's ownership moves, and each is a filing and a record under the Act.

The company's ownership runs through the share registers and the filings — every transfer needs the instrument, the stamp duty, the board's approval and the registration in the register of members, and every allotment needs the resolution, the valuation and the PAS-3 filing. The cap table that the investors and the diligence read is the record of these mechanics, and its accuracy is the company's ownership reality.

The cost of a broken share transfer is the ownership dispute and the regulatory default: the transfer that was never registered and the buyer without the title, the allotment without the PAS-3 and the shares invalid, the cap table that does not match the filings.

This service is for companies and shareholders transferring and allotting shares. We structure the transfer or the allotment under the Act, prepare the instruments, the resolutions and the filings — the SH-4, the PAS-3 — pay the stamp duty, update the register of members and the cap table, and issue the share certificates, so the company's ownership moves through the records it must.