How to Transfer Shares in a Private Limited Company
As your business grows, some shareholders may want to transfer their existing shares to other people. They can transfer these shares either by a sale or agreement. If they’re selling their existing shares, they can sell to individuals or corporate entities such as another limited liability company. Existing shareholders can also transfer shares to each other. They usually do this to change the proportion of shares they own.
Here are some simple steps for a share transfer:
- Signed Share Transfer Forms: Both the seller and the buyer must sign the Share Transfer Forms with a witness present for each party.
- Pass a Board Resolution: The board must pass a resolution approving the share transfer.
- Cancel the Old Share Certificate (Optional): The old share certificate can be cancelled.
- Issue a New Share Certificate: A new share certificate must be issued.
A Share Transfer Document is a contract between the seller and the buyer. It carries the name of the company, registered address, and number of the company, along with details of the seller and buyer, number of shares transacting, consideration, and place of transaction. There is no prescribed format for these agreements, but we have created a format that provides all necessary details to do a valid share transfer. You may download it from here.
DOWNLOAD SHARE TRANSFER TEMPLATE
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