What is Transfer of Shares ?
Transfer of shares refers to the transfer of ownership. Shares of a company are movable property and thus can be transferred like any other property. In other words, when an existing shareholder transfers the issued shares to the other person who is registered as the holder of those shares,the process can be termed as transfer of shares. A public company can freely transfer its shares, but there are some restrictions on the transfer of shares by a private company. The limits are imposed to protect the rights of investors and shareholders. Section 56 of the Companies Act, 2013 mandates that a company shall register a transfer of securities of the company only when there is a proper instrument of transfer as per the format laid down in Form No SH. 4. The section 56 also states that if a company has no share capital, it can not register a transfer of securities of the company, or the interest of a member of the company.