Section 56 · Companies Act, 2013 · Form SH-4
Share Transfer - Move Shares Between Shareholders, Correctly
From ₹2,999 + GSTSingle TransferSee fees
Transferring shares in a private limited company - whether between two existing shareholders, from a founder to a new investor, or as part of an exit - is a documentation-heavy process that's easy to get wrong. It needs a properly executed instrument of transfer (Form SH-4), payment of stamp duty at the applicable rate under the Indian Stamp Act, board approval, and an update to the company's register of members and share certificates. Skip a step and the transfer can be challenged or simply not recognised by the company later. We prepare the transfer deed, calculate stamp duty, draft the board resolution, and update your statutory registers so the new shareholder's ownership is on record and unambiguous.
- Typical Turnaround
- 7-15 days
- Instrument of Transfer
- Form SH-4
- Uniform Stamp Duty Rate
- 0.015%
- Our Fee
- From ₹2,999 + GST
- CS-Drafted — transfer deeds and board resolutions
- Stamp Duty Calculated — correctly for your state and transaction value
- Register Updated — register of members and share certificates reissued
- All Transfer Types — existing shareholders, new investors, founder exits
Transfer Shares the Right Way
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Key facts
The key facts, in one place
Everything a founder usually has to piece together from five different pages, in one place.
- Governing section
- Section 56, Companies Act, 2013
- Transfer and transmission of securities
- Instrument of transfer
- Form SH-4
- Duly stamped, dated, and executed by transferor and transferee
- Stamp duty
- As per applicable rate under the Indian Stamp Act
- Ask us for the current rate for your state and transaction value
- Board approval
- Required, unless AOA provides otherwise
- Private companies commonly restrict free transferability in the AOA
- Time limit to lodge Form SH-4
- 60 days from execution
- The transfer deed must be delivered to the company within this window
- Certificate reissue
- Within 1 month of transfer
- Section 56(4)(c) of the Companies Act, 2013
- Right of first refusal
- Often applies in private companies
- Check your AOA / shareholders' agreement before initiating
- Our fee from
- ₹2,999
- Per transfer transaction
What is a share transfer?
A share transfer is the voluntary transfer of existing shares from one person (the transferor) to another (the transferee) - for example, one shareholder selling shares to another shareholder, a founder selling shares to an incoming investor, or shares moving as part of a negotiated exit. Unlike an allotment, a transfer does not create any new shares and does not change the company's total issued share capital - it only changes who holds the existing shares.
Private limited companies in India, by design, restrict free transferability of shares - this is one of the defining differences between a private and a public company under the Companies Act, 2013. Most private companies' Articles of Association (AOA) give existing shareholders a right of first refusal, meaning shares must typically be offered to existing shareholders before being transferred to an outsider, and the board often has discretion to approve or decline a transfer. Checking the AOA and any shareholders' agreement before initiating a transfer is a step people frequently skip - and it can derail a transfer that's otherwise ready to go.
The legal mechanism for a share transfer is Form SH-4, the 'instrument of transfer' prescribed under Section 56 of the Companies Act, 2013. It must be properly filled, signed by both transferor and transferee, stamped with the correct stamp duty, and delivered to the company within 60 days of execution, along with the relevant share certificate(s). Once the board approves the transfer, the company updates its register of members and issues a fresh share certificate to the transferee, usually within a month.
Bizeneed visual guide
Share Transfer - Move Shares Between Shareholders, Correctly
Transfer shares between shareholders or to a new investor in a private limited company - Form SH-4, board resolution, stamp duty, and share transfer deed. From ₹2,999.
- 1Understand requirement
- 2Prepare documents
- 3Complete filing
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Eligibility
Who needs a share transfer?
Any situation where shares move from one existing holder to another - without new shares being created - needs this process.
- One shareholder selling all or part of their shareholding to another existing shareholder in the company
- A founder or early shareholder transferring shares to a new incoming investor as part of a secondary sale
- A departing co-founder or employee transferring vested shares back to the company or to remaining shareholders as part of an exit or buyback
- Shares moving between family members or related entities for estate or tax planning reasons
- An investor exiting the company by selling their stake to another investor or to the promoters
- Any transaction where the company's existing issued shares change hands, rather than new shares being issued
Documents
What documents do you need for a share transfer?
5 required · 3 if applicable
Email me the checklistCommon to every entity
- Form SH-4 (instrument of transfer), duly filled and signed by transferor and transfereeRequired
- Original share certificate(s) being transferredRequired
- Board resolution approving the transferRequired
- PAN and address proof of both transferor and transfereeRequired
- Stamped and dated transfer deed, with stamp duty paid at the applicable rateRequired
- No-objection / waiver of right of first refusal from other shareholders (if the AOA requires it)If applicable
- Valuation report (recommended for related-party or non-arm's-length transfers, to support the transaction value)If applicable
- Share purchase agreement (for negotiated sales with commercial terms)If applicable
Get the share transfer document checklist as a PDF
A one-page checklist covering Form SH-4, stamp duty, and board approval requirements.
Process
How share transfer works
The core process is the same whether shares are moving between existing shareholders or to a new investor.
Check the AOA and shareholders' agreement
Confirm whether other shareholders have a right of first refusal, whether board approval is discretionary, and whether any lock-in period applies to the shares being transferred.
Agree commercial terms and execute Form SH-4
The transferor and transferee agree the price and sign Form SH-4, the instrument of transfer, along with a share purchase agreement if the transaction has additional commercial terms.
Pay stamp duty
Stamp duty is paid on the transfer deed at the applicable rate under the Indian Stamp Act, calculated on the transaction value or the share's market value, whichever the state rules require.
Lodge Form SH-4 with the company
The executed and stamped transfer deed, along with the original share certificate, must be delivered to the company within 60 days of execution.
Board approves the transfer
The board of directors passes a resolution approving the transfer, unless the AOA has already delegated this authority elsewhere.
Update the register of members and issue new certificates
The company updates its statutory register of members and issues a fresh share certificate to the transferee, typically within one month of the transfer being approved, per Section 56(4)(c).
A share transfer between two willing parties on straightforward terms doesn't need to be complicated - the paperwork is what trips people up, not the underlying transaction. Our fee mainly covers getting Form SH-4, the board resolution, and stamp duty calculation right the first time, and following up to make sure the register of members is actually updated - a step that's often forgotten once the certificate changes hands.
Timeline
How long does a share transfer take?
Once commercial terms are agreed, the paperwork itself moves fairly quickly.
| Stage | Duration |
|---|---|
| Reviewing AOA / shareholders' agreement for restrictions | 1-2 days |
| Drafting Form SH-4 and board resolution | 1-2 days |
| Stamp duty payment and deed execution | 1-3 days (state-dependent) |
| Board approval and lodging with company | 2-5 days |
| Register of members update and new certificate issuance | Up to 1 month (per Section 56(4)(c)) |
The 60-day window to lodge Form SH-4 with the company is a statutory outer limit, not a target - most transfers are completed well within it once commercial terms are settled and documents are ready.
Pricing
How much does a share transfer cost?
Our fee covers documentation and filing support. Stamp duty is a separate statutory payment based on your state and the transaction value.
Single Transfer
One transferor to one transferee, straightforward terms
₹2,999 + GST
- Form SH-4 drafting
- Board resolution drafting
- Stamp duty calculation guidance
- Register of members update support
Most popular
Transfer with Valuation
For related-party transfers or where a fair value needs to be documented
₹5,999 + GST
- Everything in Single Transfer
- Valuation report coordination
- Share purchase agreement review
Multi-Party / Founder Exit
Multiple transferors/transferees or a structured exit arrangement
₹7,999 + GST
- Everything in Transfer with Valuation
- Multiple Form SH-4 instruments
- Coordination across all parties
- Updated cap table
Full fee breakdown
| Particulars | Government fee | Professional fee |
|---|---|---|
| Form SH-4 preparation (professional fee) | N/A | From ₹2,999 + GST |
| Stamp duty on transfer deed | As per the applicable rate under the Indian Stamp Act (state-dependent) | Paid at actuals - not included in our fee |
| Valuation report (if required) | N/A | Quoted separately based on scope |
| Share purchase agreement drafting (optional) | N/A | Quoted separately |
Prices exclude GST. GST at the applicable rate is added to your invoice.
Not included in any tier:
- Stamp duty itself, which is paid to the state government based on the transaction value
- Valuation report fees, if a formal valuation is needed
- Negotiation or legal advisory on commercial terms of the sale
Which share transfer plan fits your situation?
Answer three quick questions and we will recommend the right plan.
Benefits
Why get your share transfer documented properly
Legal certainty of ownership
- A properly executed and stamped Form SH-4, recorded in the register of members, is the evidence that legally establishes who owns the shares - critical during a future funding round, exit, or dispute(Companies Act, 2013, Section 56)
- Without a valid instrument of transfer, a company is not bound to register the transfer at all, leaving ownership ambiguous
Avoiding disputes later
- Checking right-of-first-refusal and lock-in clauses in the AOA before the transfer avoids a deal being challenged by other shareholders after the fact
- A documented, arm's-length valuation supports the transaction value if it's ever questioned by tax authorities or other shareholders
Clean records for future transactions
- An accurately updated register of members and cap table makes due diligence for the company's next fundraise or transaction faster and less error-prone
Common failure points
Common mistakes in share transfer
Skipping the AOA's right-of-first-refusal process
Most private company AOAs require shares to be offered to existing shareholders first. Transferring directly to an outside buyer without following this process can make the transfer open to challenge, even after Form SH-4 is executed.
Under-paying or skipping stamp duty
Stamp duty on the transfer deed is a statutory requirement under the Indian Stamp Act. An improperly stamped or unstamped instrument of transfer can be treated as invalid, and the company can be justified in refusing to register the transfer.
Not getting board approval before treating the transfer as final
Unless the AOA says otherwise, the board must approve a share transfer before the company updates its register of members. Treating a transfer as complete once Form SH-4 is signed, without board sign-off, is a common but incorrect assumption.
Forgetting to update the register of members and reissue certificates
The paperwork isn't done once the deed is signed - the company's register of members must be updated and a fresh certificate issued to the transferee, usually within a month, for the transfer to be reflected in official company records.
Using an informal sale agreement instead of Form SH-4
A private sale agreement between the parties does not, by itself, transfer legal title to shares in a company - Form SH-4, the prescribed instrument of transfer, is what the company relies on to update its records.
Every mistake above has a fix - and most can be avoided by getting the details right the first time. Getting it right first is easier than fixing it later.
If something has already gone wrong, or you want to make sure it does not, the 15-minute call below is the fastest path.
Why Bizeneed
Why handle your share transfer through us
- We check your AOA and shareholders' agreement for transfer restrictions before drafting anything, so the transfer doesn't get challenged later
- Correct stamp duty calculation at the uniform 0.015% rate, with the right party (the buyer) paying it under current rules
- CS-drafted board resolutions and Form SH-4 that companies and their auditors accept without back-and-forth
- We follow through to make sure the register of members is actually updated and new certificates issued - not just the deed signed
- Experience with everything from simple two-party transfers to multi-party founder exits
FAQ
Frequently asked questions
A share transfer is the voluntary movement of existing shares from one person (transferor) to another (transferee) - for example, between two shareholders, or from a founder to a new investor. It does not create new shares or change the company's total issued capital, unlike an allotment.
Form SH-4 is the 'instrument of transfer' prescribed under Section 56 of the Companies Act, 2013 - the legal document used to transfer shares in an Indian company. It must be signed by both the transferor and transferee, properly stamped, and delivered to the company within 60 days of execution.
A transfer moves existing shares between two people with no change in the company's total issued capital. An allotment creates and issues new shares, increasing the company's total issued share capital. They use different processes and different forms (SH-4 for transfer, PAS-3 for allotment).
Yes - stamp duty is payable on the transfer deed (Form SH-4) at a uniform rate of 0.015% of the consideration or market value (whichever is higher), under Article 62 of the Indian Stamp Act, 1899, as amended by the Finance Act, 2019 (effective 1 July 2020). This rate applies uniformly across India for both physical and dematerialised share transfers - it no longer varies by state. Under current rules, the buyer (transferee) is liable to pay this duty.
Yes. Private companies commonly restrict transferability in their Articles of Association, and the board can decline to register a transfer if it does not comply with the AOA's requirements - such as a right-of-first-refusal process not being followed, or an improperly executed transfer deed.
In most private companies, yes - unless the Articles of Association delegate this authority elsewhere. The board typically passes a resolution approving the transfer before the register of members is updated.
The executed and stamped Form SH-4, along with the relevant share certificate, must be delivered to the company within 60 days of execution.
Within one month of the transfer being registered by the board, per Section 56(4)(c) of the Companies Act, 2013.
A clause commonly found in a private company's AOA or shareholders' agreement that requires shares being sold to first be offered to existing shareholders before being transferred to an outside buyer. Skipping this step can put the validity of the transfer at risk.
Not always, but it's recommended for related-party transfers or transfers not conducted at arm's length, to document that the transaction value is fair - useful if the transaction value is ever questioned by tax authorities or other shareholders.
A share purchase agreement documenting commercial terms is not always legally mandatory for a simple transfer, but Form SH-4 itself is mandatory - it is the instrument the company relies on to record the change in ownership.
The transferor typically needs to apply for a duplicate share certificate from the company (following the company's own process for lost certificates) before the transfer can proceed, since the original certificate is normally required to be lodged along with Form SH-4.
Yes, shares can be gifted or transferred for nominal or no consideration using the same Form SH-4 process, though stamp duty is still generally payable and the transaction may have income tax implications worth checking with a tax advisor.
No. A share transfer only changes who holds existing shares - it has no effect on the company's authorised capital, issued capital, or paid-up capital, all of which only change through an allotment or a formal capital change process.
Typically PAN, address proof, and signature on Form SH-4 as the transferee. If the transferee is a new shareholder (not previously on the company's register), the company will also record their details in the register of members upon approval.
Written by Bizeneed Research Team, Service information
Last updated 9 September 2026
Sources
Procedures and form references are based on the Companies Act, 2013, and the stamp duty rate is based on the uniform rate under the Indian Stamp Act, 1899 as amended by the Finance Act, 2019 (effective 1 July 2020), current as of the last updated date. Rules can change; confirm the current position with our team before executing a transfer deed.
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