Share Transfer

Company Share Transfer

The ownership of a company limited by shares is held by the shareholders of the Company. The shareholders in consequently appoint Directors to manage the affairs of the Company. Free transfer of Shares in a private limited company is normally more restricted when compared to public companies. The shares of a private limited company are normally owned by a family or a small group of persons. Therefore majority of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider. Therefore, it is necessary to review the Articles of Association of the Company prior to effecting a share transfer.

The provision contained in the law for the free transfer of shares in a public company was start on the principle that members of the public company need have the flexibility to purchase, as well as every shareholder the flexibility to transfer. Earlier the share of companies was transferred only through physical mode, but, now after the advent of a depository system, the securities are transferred in dematerialized form, to a large extent. Glad filings can help you transfer shares of a company by completing the necessary procedures as per Companies Act, 2013.

Shareholders and Directors

Shareholders are the legal owners of the shares of a company. Shareholders can be Indians or corporate entities. They can also be NRIs or Foreign Nations. Directors of a company are appointed by the shareholders of a company to manage the affairs of a company. However, Directors can also be shareholders and shareholders can also be Directors.

Articles of Association

The articles of association of a company defines the legal rights and responsibilities of shareholders as well as Directors. Articles of Association of a company can restrict the share transfer in a private limited company.