What Forms to be filed for Share Transfers by a Company. When a shareholder decides to transfer their shares, the company must follow a clear legal process. This process ensures that the ownership transfer is valid, transparent, and compliant with the Companies Act, 2013.
To complete the procedure, certain forms must be filed and maintained by the company. Each form serves a specific legal purpose and helps record the transaction in the company’s books.
📄 1️⃣ Form SH-4 – Share Transfer Form
The most important document in a share transfer is Form SH-4.
🧾 Purpose
Form SH-4, also known as the Share Transfer Deed, is used to record the details of the share transfer between the transferor and transferee.
📝 Key Details in Form SH-4
| Field | Details |
|---|---|
| Name of Transferor | Person transferring the shares |
| Name of Transferee | Person receiving the shares |
| No. of Shares | Quantity and class of shares transferred |
| Consideration | Value or amount paid for the shares |
| Signature | Both parties must sign the form |
| Witness | A witness must verify the transaction |
💡 Note: The form must be duly stamped as per state laws and submitted to the company within 60 days of signing.
🧩 2️⃣ Register of Members (Form MGT-1)
Once the company approves the transfer, it must update the Register of Members.
This register records every shareholder’s details, including their shareholding after the transfer.
🧾 Key Points
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The company must update the register within 7 days of board approval.
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The register helps maintain accurate ownership records.
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It is maintained in Form MGT-1 as per the Companies (Management and Administration) Rules, 2014.
🧾 3️⃣ Board Resolution for Share Transfer
Before recording the share transfer, the company must obtain the Board of Directors’ approval.
A Board Resolution is passed in a meeting to authorize the transfer and issue a new share certificate to the transferee.
Essential elements include:
✅ Details of the transferor and transferee
✅ Number of shares transferred
✅ Reference to Form SH-4
✅ Approval for updating the Register of Members
🧠 4️⃣ Form MGT-7 (Annual Return)
Even though Form MGT-7 is not filed immediately after a transfer, it still plays an important role.
During the annual filing, every company must disclose all share transfers made during the year in Form MGT-7 (Annual Return).
📌 Key Purpose:
To ensure the Ministry of Corporate Affairs (MCA) maintains updated records of all shareholding changes.
⚙️ 5️⃣ Practical Compliance Checklist
| Step | Form / Document | Purpose |
|---|---|---|
| 1️⃣ | Form SH-4 | Transfer deed between transferor and transferee |
| 2️⃣ | Board Resolution | Approval by the Board of Directors |
| 3️⃣ | Register of Members (Form MGT-1) | Record updated ownership |
| 4️⃣ | Form MGT-7 | Annual disclosure of share transfers |
✅ Tip: Always verify signatures, stamp duty, and the distinctive share numbers before submitting the documents.
💼 6️⃣ Importance of Filing the Correct Forms
Proper filing of these forms ensures:
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✅ Legal validity of the share transfer
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✅ Accurate records in the company’s register
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✅ Avoidance of penalties or rejection from MCA
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✅ Transparency during audits and inspections
Thus, by maintaining each form properly, companies can ensure that every transfer follows the law and maintains corporate integrity.
✅ Final Thoughts
A company must file Form SH-4, update Form MGT-1, pass a Board Resolution, and report the transfer in Form MGT-7 during annual filings. These documents together form the legal proof of ownership change and protect the company from future disputes.
Proper documentation today avoids complications tomorrow.
Hope you get the clarity about What Forms to be filed for Share Transfers by a Company.