Procedure for Total Share Transfer : Where shareholder transfers all his shares in favour of an other person then the procedure to be followed is as under :
(1) Obtaining Share Transfer Form : The person who wants to transfer his share has to obtain a transfer form (Transfer instruments) duly signed and sealed by Company Registrar.
(2) Filling up the Details in the Transfer Forms : In a share transfer form full details regarding share buyer and share seller are to be mentioned such as name, address, name of the share holding company, market value of the share, share certificate number etc. According to the provisions, necessary stamp duty should be affixed and signed in presence of a witness. The witness has to fill his name, address, and business etc also.
(3) Submission of Transfer Instrument and Share Certificate : The purchaser of share himself, or through share brokers, delivers the completed transfer form along with share certificate to the registered office of the company. A letter of allotment is enclosed if no share has been issued. Transfer can also be executed in cases other than a sale, e.g., in case of a gift to someone. However, the procedure followed is the same.
(4) Sending the Transfer Receipt : On receiving the transfer instruments along with the share certificate, the company secretary issues a receipt for the same. This transfer receipt is the evidence of submission of documents of transfer.
(5) To Inform Regarding Transfer by Notice : After receiving share transfer form and share certificate, the company verifies transfer instruments and share certificate. After that the company informs both the parties through a notice. Blank or forged transfer can be avoided by such a notice. If any party has objection they are asked to inform within two weeks. If no objection is received from either party, it is assumed that the transfer is acceptable to both parties.
(6) Recording in the Share Transfer Register : After serving notice to both the parties if no application for an objection has been received from either the transferor or transferee, then it is assumed there is consent of both parties, and the transfer is registered by the secretary in the Share Transfer Register. The name of the tranferee is entered into the Share Transfer Register.
(7) Resolution for Approval of Transfer of Shares : After receiving share transfer applications, a meeting of the Board of Director is convened by the secretary in which discussion are made regarding the applications received for transfer of shares. In this meeting, a resolution is passed approving the transfer of shares which are sanctioned.
(8) Entering in the Register of Members : After passing the resolution of transfer of shares, the names of the transferor is deleted from the Register of Members and that of the transferee is added.
(9) Sending Share Certificate to the New Share Holder : After passing the resolution of transfer of shares, the secretary writes the name of the new shareholder on the back of the share certificate, and sends the same, with the signature of responsible officer, to the new shareholder. If share certificate is too old or there is no space to enter the name, then a new certificate is prepared and delivered to him.