Share transfer in a private company requires: board approval (per AOA restrictions), SH-4 (share transfer form) signed by transferor and transferee, share certificates surrendered and new ones issued, register of members updated. If foreign investor is involved, FEMA compliance (FC-TRS, valuation certificate) applies. Stamp duty varies by state. Virtual Auditor handles the complete transfer process including FEMA compliance where applicable. Quick Answer: Company Share Transfer — Company Share Transfer by CA/CS firm. Companies Act compliance. Expert filing and advisory. Virtual Auditor.
Company Share Transfer is a service offered by Virtual Auditor, an AI-powered CA and IBBI Registered Valuer firm (IBBI/RV/03/2019/12333) led by CA V. Viswanathan (FCA, ACS, CFE, IBBI RV), specialising in statutory compliance and corporate restructuring, from offices in Chennai, Bangalore, and Mumbai since 2012.
Source: Companies Act 2013, Companies (Management and Administration) Rules 2014 Official References: MCA Filing ↗ · Companies Act ↗
Penalty of ₹100/day per form (AOC-4 and MGT-7 separately) with no maximum cap. Persistent non-filing can lead to company strike-off and director disqualification under Section 164(2).
Is statutory audit mandatory for all companies?
Yes for all companies registered under the Companies Act, 2013. For LLPs: only if turnover exceeds ₹40 lakhs or contribution exceeds ₹25 lakhs.
How Virtual Auditor Delivers This Differently
Our compliance management platform tracks every statutory deadline across all your entities — board meetings, AGM, ROC filings, tax returns, GST returns, TDS deposits. Automated reminders sent 30, 15, and 7 days before each deadline. No penalty surprises.
Need Help With This?
Free 30-minute consultation with CA V. Viswanathan, FCA, ACS, CFE, IBBI RV. No obligation.
What You Will Receive
Upon completion, you will receive: share transfer deed (SH-4) executed by transferor and transferee, Board Resolution approving the transfer, updated Register of Members reflecting new shareholding, new share certificates issued to the transferee, stamp duty computation and payment challan, and Form PAS-3 filing with ROC (for allotment) or MGT-14 (for board resolution). Capital gains tax computation provided for the transferor's income tax filing.
Latest Regulatory Updates (FY 2025-26)
This page has been updated to reflect changes introduced in Budget 2025, recent notifications from CBDT, CBIC, MCA, SEBI, and RBI, and evolving compliance requirements for FY 2025-26. Virtual Auditor continuously monitors regulatory developments to ensure all advice and filings are current and compliant with the latest provisions.
Recent Engagement — How We Helped
Context: a group of 4 co-founders launching an AI-powered fintech startup in Bangalore.
Challenge: The founders needed to incorporate quickly to sign a term sheet with an angel investor, but had complex requirements — one NRI director, customised Articles of Association with vesting clauses, and simultaneous DPIIT startup recognition for tax benefits.
Our approach: We handled end-to-end incorporation using SPICe+ (INC-32), securing DSC for all 4 directors including the NRI (using foreign address attestation), drafted customised MOA/AOA with founder vesting and anti-dilution provisions, and filed DPIIT recognition immediately post-incorporation.
Outcome: Certificate of Incorporation received in 6 working days. PAN/TAN/GST registration allotted simultaneously through SPICe+. DPIIT recognition approved within 48 hours of incorporation. The angel round closed within 3 weeks of engagement.
This engagement illustrates Virtual Auditor's approach to company share transfer — combining regulatory expertise with practical execution to deliver results within the client's timeline.
When Is Company Share Transfer Not Required?
Share transfer may not be required when: (a) shares are being transmitted by operation of law (death or succession — use Form SH-4 for transmission, not transfer), (b) the Articles of Association restrict transfer and board approval is unlikely, (c) the transfer is being done solely for tax planning without genuine change in beneficial ownership (may attract GAAR provisions), or (d) the shares are subject to lock-in under FEMA/SEBI regulations. For Pvt Ltd companies, pre-emptive rights and transfer restrictions in the Articles must be checked before proceeding.
If you are unsure whether your situation requires company share transfer, contact us for a free preliminary assessment. We will advise you honestly — including telling you if you do not need our services.
Documents Required
The following documents are needed to initiate the company share transfer process:
PAN card and Aadhaar of all proposed directors/partners/members, passport-size photographs, proof of registered office address (rent agreement + NOC + utility bill, or ownership proof), Digital Signature Certificate (DSC) for all directors/designated partners, Director Identification Number (DIN) or application for allotment, draft constitutional document (MOA/AOA/LLP Agreement/Trust Deed), declaration and consent from directors/partners (Form INC-9/DIR-2), and professional certificate from a practicing CA/CS/Advocate.
We provide a personalised document checklist after the initial consultation, tailored to your specific entity type and situation. Documents can be shared securely via email or our client portal.
Frequently Asked Questions
Is stamp duty payable on share transfer?
Yes. Stamp duty on share transfer varies by state — typically 0.015% to 0.25% of consideration. Off-market transfers of dematerialised shares: 0.015%.
What if the transfer is to a foreigner?
FEMA compliance required: DCF valuation, pricing at or below ceiling (for outbound), FC-TRS filing within 60 days.
How to transfer shares of a private limited company?
Execute share transfer deed (SH-4). Board passes transfer resolution. Company issues new share certificates within 30 days. Stamp duty: 0.015% of consideration or market value. File MGT-14 if Articles restrict transfer.
Is stamp duty applicable on share transfers?
Yes. 0.015% (15 paisa per ₹100) of consideration or market value, whichever is higher. Payable by the transferee. For demat shares, stamp duty is collected at the depository level.
Can directors restrict share transfer?
Private companies can restrict share transfer through Articles of Association. Common restrictions: board approval, right of first refusal to existing shareholders, lock-in periods. Board cannot unreasonably refuse transfer.
Is valuation needed for share transfer?
Required when transfer is between related parties, for FEMA compliance (resident to non-resident or vice versa), and for Income Tax purposes (Section 56(2)(x) — transfer below fair market value). IBBI Registered Valuer recommended.
How is fair market value determined for share transfer?
Rule 11UA of Income Tax Rules: DCF method or NAV method for unlisted companies. For FEMA: internationally accepted pricing methodology (usually DCF). We provide multi-framework valuation covering both requirements simultaneously.