LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Shares transfer

Law Aspire (CS) (755 Points)

31 May 2013

In a Pvt Ltd company if shares are tranferred from one member to another , and there is no consideration paid by transferre. Will it be a Legal Transfer. If No , Can we write the amount of consideration in the share transfer deed for the sake of formality, if in actual no consideration was involved?

Reply
Follow
Share

3 Replies

Shankar BA(Hons) (CS) (278 Points)
Replied 31 May 2013

Dear Rachit,

Generally speaking, when a Share Transfer takes place, first its face value amount is the consideration. After Board discussions and share valuation, the consideration is arrived.

In your query when there is no consideration involved, then you have to enter the share value multiplied by its face value and it is a legal transfer.

But see to that the exact value which you have entered the consideration column is the same with the money transaction. If not, then it is illegal.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 31 May 2013

Agree with the learned member above.

If the transfer in between close relatives, without consideration, then you can go for transfer of share through gift. In this method execution of gift deed would be required.