Saturday 1 November 2014

Companies Act 1956: Share Transfers

Share Transfers 
Section 108 Read with Sec 111
When a person transfers his shares to some other person then the transferer and the transferee have to submit a share transfer deed along with the share certificate to the company, then the company will register the shares in the name of transferee.
After registering the shares in the name of transferee company will have to issue a new share certificate and the same will be given to transferee.
If the company does not register the shares in the name of transferee then the transferee may make a complaint to the NCLT and the NCLT may order the company to register the transfer of shares.
If the company does not register the shares after the order of NCLT then the NCLT may impose fine on them.

Under Section 109B any person whose shares are transferred to some other person by law will also apply to the company and it is known as transmission, in transmission the transferee may also apply for registration. Application to NCLT is made under section 111.

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