For
transfer of all shares included in one share certificate:
1.
Receiving the
instrument of transfer: The instrument of transfer is a prescribed transfer
form. This form is available at the registered office of the company or at the
broker’s office. The form contains the information of the transferor and
transferee. This form is to be filled properly signed by the transferor and
transferee. The form i.e. instrument of transfer is to be stamped by the
Registrar of Companies. The secretary receives the instrument along with the
share certificates and necessary transfer fee.
2.
Scrutiny of the
instrument: - After receiving the instrument, the secretary scrutinizes it. The
secretary mainly checks:
Ø Whether the
entries made in the instrument are correct, Instrument is duly stamped and
signed, Instrument is properly endorsed (approved), and Stamp duty is paid.
3.
Issuing transfer
receipt: -If the secretary finds that all the entries in transfer instrument
are correct, he issues a temporary receipt, which is known as “Transfer Receipt”
4.
Notice of
Lodgement: -The secretary sends a notice of lodgement to the transferor and
transferee. The notice states that the instrument of transfer has been lodged
with the company. The transferor and transferee can convey their objections
regarding transfer within two weeks to the company.
5.
Board Meeting: -The secretary
arranges the Board meeting to approve the transfer of shares. In the meeting
the Board approves or refuses the transfer. For refusal the board has to give a
valid reason.
6.
Entries in the
Register of transfer: -A secretary then makes entries in the register of
transfer.
7.
Entries in the
Register of Members: -After entries in the register of transfer, are
made, transfer becomes legal and then the entries are made in the Register of
members. The name of the transferor is cancelled from the register and the same
name of the transferee is entered in his place.
8.
Dispatch of Share
Certificate: -After the entries are made in the Register of Members, the secretary
makes necessary arrangement to send the shares certificate to the transferee.
It is sent at registered address of the transferee.
B.
For transfer of
part of the shares included in one share certificate are to be transferred:
This happens when
the shareholder wants to transfer only part of the shares. E.g.: if a
shareholder is having 1000 shares of a company which are mentioned in one share
certificate and he wants to transfer 600 shares and retain 400 shares. In this
case transfer is divided into two stages:
·
Certification of transfer stage..................Registration
of transfer stage
