In a Private Limited Company, the shareholders assist in determining the company’s ownership. If you want to introduce new investors or transfer ownership during your business, you must transfer the shares. Today, we will look at the process of transferring shares in a Private Limited Company, along with that this blog will include all the information on Transfer of Shares, the procedure of Transfer of shares, and other information on Share transfer in Private Limited Company.
The term Share Transfer refers to the voluntary transfer of a share’s title from one party to another. In general, a business’s shares are freely transferable, although the articles of incorporation may impose certain limits on the transfer of Private Limited Company Shares.
Under specific situations outlined in the Articles of Association, the directors may have the authority to refuse the registration of a share transfer.
If a shareholder decides to sell his shares, the director or the company’s auditor must offer the shares to other existing members of the Private Limited Company at a price decided by the director or the company’s auditor. If that condition is not fulfilled then the process of share transfer will be kept on hold. The value of the shares can also be calculated using the methodology specified in the Articles of Association. If no present shareholders are interested, the company’s shares can be freely transferred to a third party.
First steps towards the procedure of transferring shares from the existing shareholder to the new shareholder:
Only when the transfer is registered by the corporation the share transfer procedure will be completed. The corporation must transmit the share certificate to the transferee within one month of registration. The transferability of shares in a private limited company is completely done by following the norms made in AOA while shareholders in a public limited company can readily and freely transfer their shares.
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