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Validity of Share Transfer Deed Form under Companies Act 2013

The question of validity of share transfer deed arises only in case of transfer of securities held in physical form i.e. share certificate hard copy, and not in case of transfer of securities by demat accounts.

The validity of a Securities Transfer Form (Share Transfer Deed) mainly depends upon the following three important factors.

1) Proper Instrument of Transfer

The instrument (form/deed) used for transfer of shares should be the instrument as prescribed under the Companies Act, 2013.

An instrument of transfer shall be in Form SH-4, the template of which is provided in Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014.

Unless the transfer is executed in Form SH-4, the companies will not process the transfer request from the shareholders.

Additionally, Form SH-4 has to be duly filled-in in all respects, viz. description of securities,  share certificate details, transferor's particulars, the name, address and occupation of the transferee, etc.

2) Stamped, Dated and Executed

Form SH-4 shall be duly stamped, dated and executed by or on behalf of the transferor and the transferee.

Necessary stamp duty is required to be paid by affixing of the stamps at the back side of the form.

3) Validity Period

Duly filled-in and executed Form SH-4 has to be delivered to the company by the transferee or the transferor within 60 days from the date of execution.

Therefore, the share transfer deed i.e. Form SH-4 is valid for 60 days from the date of execution. After which the company will not process the share transfer request and the share transfer will not be successful.

Date of execution is mentioned at the top of the Form SH-4.

The share certificate(s) or the letter of allotment of securities has to be enclosed and sent to the company along with the Form SH-4.

Comments

  1. Can a share transfer deed dated 01/01/1985 can be re validated now ?

    ReplyDelete
    Replies
    1. To my best knowledge, it can't be revalidated now. You have to execute a new one. If one of the parties is not alive for signing, then you will have to submit death certificate or court order or affidavits etc. Get in touch with the company, they will guide you.

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