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When a company is formed, it capitalizes an authorized amount as share capital. These shares are owned by shareholders who by the means of owning the shares become the owner of the company. The shareholders have the authority to appoint Directors who are authorized to manage the company. However, the directors are not the owners of the company, shareholders are.
The shareholder can be natural person or corporate entity. As the shareholders are the legal owners of a company, hence the ownership of the company is transferable and can be done by transferring the shares from one entity to another. For a public or government company, Share Transfer has a wide spectrum as compared to a privately owned company, where the ownership of the company is more restricted. The Private Limited Company is more often than not, is owned by a family or a closed group of persons. Hence the Share Transfer is limited to members within in the family of group.
Depending upon the type of company, the Articles of Association needs to be studied and reviewed before commencing the Share Transfer. The transferor voluntarily hands over the rights and duties towards the company to the transferee by the Share Transfer Deed. A professional guidance to effect the Share Transfer is recommended. Jain Divya & Associates can help you in transferring shares with not much ado. Set up a consulting session with Jain Divya & Associates to know more about the share compliances.