The validity of a Share Transfer Deed i.e.
whether a transfer deed is valid or not, depends upon the following three factors.
(1) Proper Instrument – duly filled in
The instrument used for transfer of shares should be the instrument as
prescribed under the Companies Act, 2013 i.e. an instrument of transfer shall be in Form SH-4 as provided in the Companies (Share Capital and Debentures) Rules, 2014.
Unless the transfer is executed in the instrument as given above, Companies will not process the transfer request
from the shareholder. In addition to that, all the respective details viz. name, address and
occupation in the transfer form is required to be properly filled in
(2) Sign & Stamp
The transfer deed as mentioned above has to be duly
signed by both transferor and transferee. Necessary stamp duty is required to
be affixed in the back side of the form.
(3) Validity period
In accordance of sub-section (1) of the
section 56 of the Companies Act, 2013 every instrument of transfer with the date of its execution specified thereon shall be delivered to the company within 60 days from the date of such execution.
Therefore, the transfer deed is valid for 60 days from the date of execution, after which the company will not process the share transfer and the share transfer will not be successful.