Transfer of share

Transfer of shares means transferring title of shares voluntarily, by one party to another
Transfer of shares refers to the intentional transfer of title of the shares between the transferor (one who
transfers) and the transferee (one who receives). The shares of a public company are freely transferable
unless the company has a valid reason to disallow the same.
 Who can be transfer shares?

 Only a person who has the capacity to transfer can transfer a share. A person who
properly becomes a member of the company is entitled to effect a transfer. The
capacity to transfer shares is not co-extensive with the capacity to enter into a
contract. Even a minor or an infant can become a member. If he properly becomes
a member, he acquires a right to transfer his shares.
 Stamp duty in transfer of shares

 Before the instrument of transfer is lodged with a company, it should be duly stamped. The
transfer of shares attracts stamp duty under the Indian Stamp Act
 The Government has prescribed a stamp duty of Re.0.50 for every Rs.100 of the value of the
shares at which shares were bought and not the face value of shares under transfer.
 The stamping has to be done by the transferor unless there is a contract to the opposite.
 Steps in Transfer of Shares
 Step 1: Obtain Share Transfer Deed. ...
 Step 2: Obtain No Objection Certificate(NOC) ...
 Step 3: Submit Transfer Documents. ...
 Step 4: Board Approval. ...
 Step 5: Pay Stamp Duty. ...
 Step 6: File Necessary Forms.
 Dematerialization (DEMAT)

 Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping.

Actual stock certificates are then removed and retired from circulation in exchange for electronic
recording.
 With the age of computers and the Depository Trust Company, securities no longer need to be in
certificate form. They can be registered and transferred electronically.
 The Benefits of Dematerialization

 Easy and Convenient: A Demat account provides you the facility to carry out the
transactions electronically. There is no need for you to be physically present at the broker’s
place to settle a transaction.
 Fund Transfer: By linking your Demat account with the bank account you can easily
transfer funds electronically. This saves you from the hassles of drawing a cheque or
transferring the funds manually.
 Safe and Secure: Demat account is the most secure and safest way to carry out transactions
by electronic means. All the risks like theft, damage, loss of share certificates, etc. that were
associated with holding shares in physical form are completely eliminated.
 Nomination Facility: Demat account provides you the facility to grant the right to operate
your Demat account to the nominee in your absence. With this facility, you can carry out
transactions in your Demat account with the help of a nominee when you are not in a
situation to do it yourself.
 The Benefits of Dematerialization

 Ease In Receiving Corporate Benefits: Demat account eases the process of receiving various
corporate benefits like dividends, interest, refunds, etc. All the benefit amount gets directly
credited into the Demat account.
 Multiple Purposes: In the Demat account, you can not only hold shares or equities but also
debt instruments. You can even purchase, hold and sell mutual fund units through the Demat
account.
Thank you