Are Statutory Registers Required for Share Transfer. Every company in India must maintain certain statutory registers under the Companies Act, 2013. These registers record essential details about shareholders, directors, and company operations. When shares change hands, one common question arises — is a statutory register required for share transfer?
The answer is yes. Maintaining statutory registers is legally mandatory to document every transfer of shares in a company’s records.
🧾 1️⃣ What Are Statutory Registers?
Statutory registers are official company records maintained as per the Companies (Management and Administration) Rules, 2014.
They serve as a permanent record of vital information such as:
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Shareholders’ details
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Directors and key managerial personnel
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Share transfers and allotments
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Debenture holders (if any)
📘 These registers act as the company’s legal proof of ownership and help ensure full transparency in corporate governance.
🧩 2️⃣ Which Statutory Register Is Required for Share Transfers?
The key statutory register related to share transfers is the Register of Members (Form MGT-1).
According to Section 88(1)(a) of the Companies Act, 2013, every company must maintain a register containing:
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Name and address of each member
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Number and class of shares held
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Date of becoming a member
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Date of cessation (when shares are transferred)
After any share transfer, the company must update the Register of Members to reflect the new shareholder details.
🧮 3️⃣ Role of Form MGT-1 in Share Transfers
Form MGT-1 is not filed with the government but is maintained internally by the company.
It acts as a living document, updated after each transfer or allotment.
Here’s what the company must record in MGT-1 after each transfer:
| Details to Record | Purpose |
|---|---|
| Name of Transferor | Original shareholder |
| Name of Transferee | New shareholder |
| Share certificate number | Identification of transferred shares |
| Date of registration | Date company approves transfer |
| Consideration value | Purchase amount (if applicable) |
⚙️ 4️⃣ Legal Requirement and Compliance
Under Section 88 of the Companies Act and Rule 3 of the Companies (Management and Administration) Rules, 2014, maintaining the Register of Members is compulsory for all companies — whether private or public.
If a company fails to maintain or update this register after share transfers:
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The company and its officers are liable for penalties.
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Shareholders may face disputes over ownership in the future.
📜 Therefore, proper maintenance of MGT-1 acts as legal evidence of valid share ownership.
🧠 5️⃣ Other Registers Related to Shares
In addition to the Register of Members, companies may also maintain:
| Register Name | Purpose |
|---|---|
| Register of Share Transfers | To track all share movement transactions |
| Register of Share Allotments | To record issue of new shares |
| Register of Renewed or Duplicate Share Certificates | For tracking reissued certificates |
| Register of Debenture Holders | For companies issuing debentures |
Maintaining these records helps ensure accuracy, transparency, and compliance during any inspection by the Registrar of Companies (ROC).
✅ 6️⃣ Conclusion
Yes, statutory registers are absolutely required for share transfer.
The Register of Members (MGT-1) is the key legal record that must be updated whenever shares change ownership.
In simple terms:
📄 Form SH-4 documents the transfer transaction
📘 MGT-1 records the ownership change officially
Maintaining these registers properly ensures smooth compliance and protects both the company and shareholders in the long run.
Hope you get the clarity about Are Statutory Registers Required for Share Transfer.