Company law

Dear Client,
Both the transferor and transferee of the share must satisfy specific eligibility criteria under the Companies Act and the company's Articles of Association for a valid, legally enforceable transfer. Any individual or entity whose name appears in the Register of Members as the legal holder of shares can initiate a transfer by executing Form SH-4 with proper stamp duty. Form SH-4 is the mandatory statutory instrument for share transfer registration under Section 56 of the Companies Act, 2013, read with Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014. A Share Transfer Agreement, while not legally required for registration, is strongly recommended for transactions above ₹5 lakhs to document commercial terms, warranties, representations, and indemnities that protect both parties. A Share Transfer Agreement, while not mandatory for registration, this agreement provides crucial legal protection and helps prevent future disputes between the transferor and the transferee. The Transferor or the transferee of the shares needs to send Form SH 4 to the company within 60 days from the date of execution, of the share transfer agreement along with the share transfer certificate or certificate relating to securities. A share transfer agreement outlines the sale/gift of shares, detailing parties (Transferor/Seller & Transferee/Buyer), share specifics (number, type, certificate/folio numbers, distinctive numbers), consideration (price), date, warranties, and governing law, acting as proof of mutual agreement for transfer and requiring proper execution with signatures and often witnessed/stamped for legal validity. For proforma Share Transfer Agreement in editable word format, you can search on google logging legal/business document websites and download one that suits your purposes most.