In a private limited company, shares can be transferred only after getting approval from the Board of Directors. The Board first checks the share transfer deed and other required documents and, once satisfied, approves the transfer. After approval, the company updates its records, removes the transferor’s name, and issues a new share certificate to the transferee.
The
resolution given below is a sample format for reference.
CERTIFIED TRUE COPY OF RESOLUTION
PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF FORMFILINGGUIDE PRIVATE LIMITED HELD
ON FRIDAY, THE 10TH DAY OF OCTOBER, 2025, AT 10:00 A.M. AT THE
REGISTERED OFFICE OF THE COMPANY SITUATED AT SIDDHARTH CHAMBER, NEW DELHI,
INDIA, 110016
APPROVAL
OF TRANSFER OF SHARES
“RESOLVED
THAT pursuant to
the provisions of Section 56 of the Companies Act, 2013 read with the rules
made thereunder and in accordance with the Articles of Association of the
Company, the Board hereby approves the transfer of 700 (Seven hundred) equity
shares of ₹10/- each, fully paid-up, bearing distinctive numbers from 01 to 700,
standing in the name of Mr. Karan (Transferor) in favour of Ms. Khushi
(Transferee), as per the Share Transfer Deed(s) duly executed and submitted to
the Company.
RESOLVED
FURTHER THAT the
Board hereby takes note that the original share certificate(s) along with duly
executed Form SH-4 and other relevant documents have been produced before the
Company and found to be in order.
RESOLVED
FURTHER THAT the
name of Ms. Khushi be entered in the Register of Members of the Company as the
holder of the aforesaid shares and the name of Mr. Karan be removed to that
extent.
RESOLVED
FURTHER THAT the
existing share certificate(s) issued in the name of Mr. Karan be cancelled and
a new share certificate(s) be issued in the name of Ms. Khushi under the common
seal of the Company, if any.
RESOLVED
FURTHER THAT any
Director of the Company be and is hereby authorised to make necessary entries
in the statutory registers, sign and issue the share certificate(s), and to do
all such acts, deeds, matters and things as may be necessary or incidental to
give effect to this resolution.”
CERTIFIED
TO BE TRUE.
For
and on Behalf of
FORMFILINGGUIDE
PRIVATE LIMITED
Manoj
(Director)
DIN: 01234567
Date:
10.10.2025
Place:
New Delhi
Frequently
Asked Questions (FAQs)
1. Is a board resolution really required for transferring shares in a private company?
Yes, it
is required. In a private limited company, shares cannot be transferred
automatically. The Board of Directors must first approve the transfer in a
board meeting before the company can register it.
2. Which law covers the transfer of shares in a company?
The
transfer of shares is mainly governed by Section 56 of the Companies Act, 2013.
Along with this, the company’s Articles of Association also play an important
role in deciding how and when shares can be transferred.
3. How much time does a company get to approve a share transfer?
Once the
company receives the duly signed share transfer deed and other required
documents, it must complete the process and issue a new share certificate
within 30 days.
4. Is Form SH-4 mandatory for transferring shares?
Yes, Form
SH-4 is compulsory. Without a properly executed and stamped SH-4, the Board
cannot approve the share transfer, even if both parties agree to it.
5. Can the Board reject a request for transfer of shares?
Yes, the
Board can refuse the transfer if it does not follow the company’s Articles or
if legal requirements are not met. However, the reasons for refusal must be
properly recorded and communicated.
6. Does a company need to file anything with the ROC for share transfer?
No
separate ROC filing is required for transfer of shares. The company only needs
to update its internal records, such as the Register of Members and share
certificates.
7. When is a new share certificate issued after the transfer?
After the
Board approves the transfer and updates the records, a new share certificate is
issued in the name of the transferee, usually within 30 days.
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