Transfer & Transmission of Shares

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Overview

A Private Limited Company in India is a type of business structure that features private ownership, limited liability, and a separate legal identity from its shareholders. This distinct legal status protects shareholders from being personally liable for the company’s debts or obligations.

These companies require a minimum of 2 and can have up to 200 shareholders, with shares not being publicly traded. Managed by a Board of Directors, they are required to comply with the regulatory framework set by the Indian government.

Ideal for small to medium-sized enterprises, Private Limited Companies offer both operational flexibility and ease of management.

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Basic Requirements

Basis of Comparison	Transfer of Shares	Transmission of Shares
Act	Transfer of Shares is a voluntary act	whereas a Transmission of Shares occurs under normal operation of law.
Affected By	The deliberate act of parties.	Insolvency, death inheritance or lunacy of the member.
Initiated By	Transferor and Transferee	Legal heir or receiver
Consideration	Adequate consideration must be there.	No consideration is paid.
Execution of valid transfer deed	Required	Not required
Liability	Liabilities of transferor cease on the completion of the transfer	Not required
Stamp Duty	Payable on the market value of shares	No need to pay

Penalty for failure to comply:

The firm may face a fine ranging from a minimum of INR 25,000 to a maximum of INR 5,00,000 for any non-compliance with the company laws, and each responsible officer of the company may incur a fine between INR 10,000 to INR 100,000 for their part in the default.

Timelines

Businesses with a share capital:

✔ Within 60 days of execution, the company must not record any transfer of shares or ownership interest to any beneficial owners through proper documentation.

Application by the transferor: s

✔ The company should not register the transfer until it has given notice to the transferor of receipt within 2 weeks.

Transfer & Transmission of Shares

Overview

Unlock Your Business Financial Potential Today!

Basic Requirements

Penalty for failure to comply:

The firm may face a fine ranging from a minimum of INR 25,000 to a maximum of INR 5,00,000 for any non-compliance with the company laws, and each responsible officer of the company may incur a fine between INR 10,000 to INR 100,000 for their part in the default.

Timelines

Businesses with a share capital:

Application by the transferor: s

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