TRANSFER AND TRANSMISSION OF SHARES
Meaning of transfer and transmission
The word 'transfer' is an act of the parties by which title to property is transferred from one person to another. The word 'transmission' is referable to devaluation of title by operation of law. It may be by succession or by testamentary transfer.
Transfer Deed is compulsory
Section 108 provides that a company shall not register a transfer of shares of, the company, unless a proper transfer deed in Form 7B as given in the Companies (Central Government's) General Rules and Forms, 1956 duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company, alongwith the certificate relating to the shares, or if no such certificate is in existence, alongwith the letter of allotment of the shares:
Validity of unstamped/non-cancelled stamped on transfer deed
Section 108 requires that where share transfer form is delivered to the Board it should be duly stamped. It means stamp of adequate value should be affixed and cancelled on transfer deed.
Determination of valuation of shares for affixing stamps on the transfer deed
It was held in Union of India v Kulu Valley Transport Ltd. (1958) that in case shares are not quoted, the value of the shares for the purpose of stamp means the price that the shares would fetch at the time of transfer or consideration agreed, whichever is higher.
However, no transfer duty is applicable for transfer of shares in case of shares are in D-mat form.
Value of share transfer stamps to be affixed on the transfer deed
Stamp duty for transfer of shares is 25 paise for every Rs. 100 or part thereof of the value of shares as per Notification No. SO 130(E), dated 28-01-2004 issued by the Ministry of Finance, Department of Revenue, New Delhi.
Validity of transfer deed …..
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