Understanding Share Transfer Process — the formal process of transferring ownership of shares from one shareholder to another — starts with knowing exactly what the process involves. Here's a step-by-step breakdown for companies and shareholders undertaking a transfer of shares.
Step 1
Execute a share transfer deed between the transferor and transferee.
Step 2
Obtain board approval as per the Articles of Association.
Step 3
Pay applicable stamp duty on the transfer.
Step 4
Update the register of members and issue new share certificates.
Documents to Keep Ready
Before starting, it helps to have these ready so the process moves without unnecessary back-and-forth:
- Share transfer deed (Form SH-4)
- Board approval of the transfer, where required
- Valuation of shares, especially for related-party transfers
- Updated register of members
- Share certificates for cancellation/reissue
- Stamp duty payment on the transfer deed
What to Watch Out For
Skipping proper valuation, especially for related-party or related-entity transfers — this is one of the most frequent slip-ups at this stage, so it's worth double-checking before you proceed.
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