What is Share Transfer Form? When a shareholder transfers their shares to another person, they must follow a legal process. The most crucial document in that process is the Share Transfer Form. It records the details of the transfer and shows that both parties agree to it.
In India, this form is called Form SH-4. It plays a major role in ensuring that the ownership of shares changes hands correctly and lawfully.
🧾 1️⃣ Meaning of Share Transfer Form (Form SH-4)
The Share Transfer Form is a legal document mentioned under Section 56 of the Companies Act, 2013 and Rule 11(1) of the Companies (Share Capital and Debentures) Rules, 2014.
👉 It acts as a transfer deed and includes the following details:
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Information about the transferor (the person selling shares)
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Information about the transferee (the person buying shares)
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The number and class of shares being transferred
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The price paid for the shares
Since this document captures consent from both sides, it ensures the transfer process stays legal, transparent, and valid.
🧩 2️⃣ Purpose of the Share Transfer Form
The main goal of Form SH-4 is to make the ownership change clear and verifiable. Without this form, a company cannot legally record the transfer.
Here’s why it matters:
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✅ It gives legal approval for the transfer.
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✅ It confirms both parties agree on the terms.
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✅ It helps the company update its Register of Members.
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✅ It provides proof during audits or disputes.
Therefore, the form keeps the company’s ownership records clean and compliant.
📝 3️⃣ Key Contents of Form SH-4
A complete Share Transfer Form must include the following fields:
| Section | Details Required |
|---|---|
| Company Name | The company where the shares are being transferred |
| Class of Shares | Type of shares (Equity or Preference) |
| Number of Shares | Exact quantity being transferred |
| Distinctive Numbers | Unique numbers identifying the shares |
| Consideration Amount | The price agreed for the shares |
| Transferor Details | Name, address, and signature |
| Transferee Details | Name, address, and signature |
| Witness Signature | Verification by a witness |
| Date of Execution | Date on which the form is signed |
💡 Tip: Pay the correct stamp duty according to your state’s Stamp Act before submitting the form.
🕒 4️⃣ Time Limit for Submission
Both parties must submit the signed and stamped Form SH-4 to the company within 60 days from the date of signing.
After receiving the form, the company’s Board of Directors reviews it and updates the Register of Members. Once the transfer is approved, the transferee officially becomes a shareholder.
🧠 5️⃣ Step-by-Step Process for Share Transfer
Follow these steps to transfer shares smoothly and lawfully:
1️⃣ Fill Form SH-4 completely with accurate details.
2️⃣ Pay stamp duty based on the share value.
3️⃣ The transferor submits the form and share certificates to the company.
4️⃣ The company checks all documents for errors or missing details.
5️⃣ Once verified, the company updates its Register of Members.
6️⃣ Finally, the new share certificate is issued to the transferee.
By following these steps, both parties can ensure a quick and valid transfer.
🧭 6️⃣ Why Form SH-4 Is Important for Compliance
Every company must maintain Form SH-4 as part of its statutory records. Proper documentation ensures legal compliance and avoids penalties.
If a company ignores this process, it may face:
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Disputes over ownership
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Penalties under the Companies Act
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Rejection of transfer requests
Hence, filing Form SH-4 correctly protects the company and its shareholders from legal complications.
✅ Final Thoughts
The Share Transfer Form (Form SH-4) is the backbone of a legitimate share transfer. It ensures mutual consent, prevents disputes, and keeps company records accurate. By completing and submitting it on time, businesses can maintain transparency and full legal compliance.