Change In Directors
This query is : Resolved
19 February 2010
A, B, C and D are the equal shareholders of a Private Limited Company. Mr. A and Mr. B are the Directors of the Company. They would like to relieve themselves from the Position of Directors and also would like to transfer their shares to C and D equally. Mr. C and Mr. D would like to get appointed as the Directors of the Company. What is the procedure to be followed in this regard?
19 February 2010
Hello,
First appoint Mr. C and D as director of the company and file form-32 with the digital sign of existing director of the company. After the approval of form 32 for appointment file second form 32 for resignation of old directors and here also you can use the digital sign of old director.
Procedure for appointment of director
1. First collect DIN No. of proposed director and get it approved from MCA.
2. Collect consent letter from the proposed director. (Recommended but not compulsory)
3. Convene a Board Meeting for appointment of director
4. Download Form-32 from www.mca.gov.in
5. Fill form-32 and get it certified from a PCS/PCA and upload the same on MCA site for ROC filing with in 30 days from the date of Appointment of director (Board Meeting).
Regards
First appoint Mr. C and D as director of the company and file form-32 with the digital sign of existing director of the company. After the approval of form 32 for appointment file second form 32 for resignation of old directors and here also you can use the digital sign of old director.
Procedure for appointment of director
1. First collect DIN No. of proposed director and get it approved from MCA.
2. Collect consent letter from the proposed director. (Recommended but not compulsory)
3. Convene a Board Meeting for appointment of director
4. Download Form-32 from www.mca.gov.in
5. Fill form-32 and get it certified from a PCS/PCA and upload the same on MCA site for ROC filing with in 30 days from the date of Appointment of director (Board Meeting).
Regards
19 February 2010
Meaning of transfer of share
The word 'transfer of share' is an act of the parties (transferor and transferee) by which title to share is transferred from one person to another. Transfer of share may also take place succession.
Transfer Deed is compulsory for share transfer
In Companies Act, 1956 transfer of share is governed by Section 108. As per section 108 a company shall not register a transfer of shares of, the company, unless a proper transfer deed in Form 7B 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 share certificate, and where no such certificate is in existence, attach letter of allotment with of the share transfer deed. Duly stamped means stamp of adequate value should be affixed and cancelled on share transfer deed. However, no need to pay stamp duty where shares are in Demat form.
Rate of Stamp duty
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.
Transfer procedure not applicable under the depositories system
Section 108(3) provides that the provisions of section 108 shall not apply to transfer of securities under the depositories system.
Validity of transfer deed
In the case of listed company, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under clause (a) of section 108(1A) or within twelve months from the date of such presentation,
whichever is later.
In any other case, within two months from the date of such presentation.
Submission of instrument for transfer to the Company
Transfer Deed duly executed for the registration of a transfer of the shares or other interest of a member in a company may be submitted either by the transferor or by the transferee together with the relevant share certificates.
The word 'transfer of share' is an act of the parties (transferor and transferee) by which title to share is transferred from one person to another. Transfer of share may also take place succession.
Transfer Deed is compulsory for share transfer
In Companies Act, 1956 transfer of share is governed by Section 108. As per section 108 a company shall not register a transfer of shares of, the company, unless a proper transfer deed in Form 7B 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 share certificate, and where no such certificate is in existence, attach letter of allotment with of the share transfer deed. Duly stamped means stamp of adequate value should be affixed and cancelled on share transfer deed. However, no need to pay stamp duty where shares are in Demat form.
Rate of Stamp duty
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.
Transfer procedure not applicable under the depositories system
Section 108(3) provides that the provisions of section 108 shall not apply to transfer of securities under the depositories system.
Validity of transfer deed
In the case of listed company, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under clause (a) of section 108(1A) or within twelve months from the date of such presentation,
whichever is later.
In any other case, within two months from the date of such presentation.
Submission of instrument for transfer to the Company
Transfer Deed duly executed for the registration of a transfer of the shares or other interest of a member in a company may be submitted either by the transferor or by the transferee together with the relevant share certificates.
19 February 2010
Procedural steps to be followed for transfer of shares
(i) Obtain the transfer deed Form 7B, endorsed by the prescribed authority.
(ii) For transferring debentures, the instrument of transfer need not be in the prescribed Form 7B but this Form can be used, being convenient to do so.
(iii) Get the transfer deed duly executed both by the transferor and the transferee or on their behalf in accordance with sections 108 and 109 of the Act and the Articles of Association, in case of shares, and also in accordance with trust deed in the case of debentures.
(iv) The transfer deed should bear stamps according to the Indian Stamp Act and Stamp Duty Notification in force in the State concerned. The present rate of transfer of shares is 25 Paise for every one hundred rupees of the value of shares or part thereof.
(v) See that the stamps affixed on the transfer deed are cancelled at the time or before signing of the transfer deed.
(vi) The signatures of the transferor and the transferee in the share/debenture transfer deed must be witnessed by a person giving his signature, name and address.
(vii) Attach the relevant share or debenture certificate or allotment letter with the transfer deed and deliver the same to the company. The share transfer deed should be deposited with the company within the time limits.
(viii) Where the application is made by the transferor and relates to partly paid-up shares, the company has to give due notice of the amount due on shares/debentures to the transferee and the transferee shall raise objection, if any within two weeks from the date of receipt of the said notice.
(ix) If signed transfer deed has been lost, affix the same stamp on a written application. In such case, the Board may, if it thinks fit to do so, register the transfer on such terms of indemnity as it thinks fit.
(x) If the shares of the company are listed on a recognized Stock Exchange, then the company cannot charge any fee for registration of transfers of shares and debentures.
(i) Obtain the transfer deed Form 7B, endorsed by the prescribed authority.
(ii) For transferring debentures, the instrument of transfer need not be in the prescribed Form 7B but this Form can be used, being convenient to do so.
(iii) Get the transfer deed duly executed both by the transferor and the transferee or on their behalf in accordance with sections 108 and 109 of the Act and the Articles of Association, in case of shares, and also in accordance with trust deed in the case of debentures.
(iv) The transfer deed should bear stamps according to the Indian Stamp Act and Stamp Duty Notification in force in the State concerned. The present rate of transfer of shares is 25 Paise for every one hundred rupees of the value of shares or part thereof.
(v) See that the stamps affixed on the transfer deed are cancelled at the time or before signing of the transfer deed.
(vi) The signatures of the transferor and the transferee in the share/debenture transfer deed must be witnessed by a person giving his signature, name and address.
(vii) Attach the relevant share or debenture certificate or allotment letter with the transfer deed and deliver the same to the company. The share transfer deed should be deposited with the company within the time limits.
(viii) Where the application is made by the transferor and relates to partly paid-up shares, the company has to give due notice of the amount due on shares/debentures to the transferee and the transferee shall raise objection, if any within two weeks from the date of receipt of the said notice.
(ix) If signed transfer deed has been lost, affix the same stamp on a written application. In such case, the Board may, if it thinks fit to do so, register the transfer on such terms of indemnity as it thinks fit.
(x) If the shares of the company are listed on a recognized Stock Exchange, then the company cannot charge any fee for registration of transfers of shares and debentures.
19 February 2010
Thank You very much....sir ....for your wonderful reply...really amazed and admiring you....
But sorry i have still certain doubts in this regard:
1.Can the Consent letter be obtained in a Plain Paper?
2. Can you send me a specimen copy of Consent Letter?
3. You clearly mentioned that a Board Meeting has to be convened for Appointment of C and D. What kind of resolution must be passed i.e., Ordinary or Special?
4. Whether any resolution must be passed for accepting the resignation of Mr. A and Mr. B?
5. As you said to file first Form 32 for appointment and Then again Form 32 for Change in Directors. My doubt is whether while filing 2nd Form 32 can I mention the Resignation of Mr.A and Mr. B and also can I mention the Change in the designation of Mr. C as the Managing Director both things simultaneously in the 2nd form Itself. This is because MR.C wants to continue as the Managing Director and Mr. D will be the Director.
But sorry i have still certain doubts in this regard:
1.Can the Consent letter be obtained in a Plain Paper?
2. Can you send me a specimen copy of Consent Letter?
3. You clearly mentioned that a Board Meeting has to be convened for Appointment of C and D. What kind of resolution must be passed i.e., Ordinary or Special?
4. Whether any resolution must be passed for accepting the resignation of Mr. A and Mr. B?
5. As you said to file first Form 32 for appointment and Then again Form 32 for Change in Directors. My doubt is whether while filing 2nd Form 32 can I mention the Resignation of Mr.A and Mr. B and also can I mention the Change in the designation of Mr. C as the Managing Director both things simultaneously in the 2nd form Itself. This is because MR.C wants to continue as the Managing Director and Mr. D will be the Director.
19 February 2010
In a private company there is no need to attach consent letter with form 32.
In a board meeting resolutions are passed with simple majority.
special or ordinary resolutions are required only in the case of shareholder meeting.
No need to pass specific resolution for resignation. However noting in the BM minutes would be enough.
Resolution--Taking note of Resignation of Director
RESOLVED THAT the resignation of Mr. Pallav jain, Director of the Company, be and is hereby accepted with effect from the 26th day of the June, 2001 and that the Secretary of the Company be and is hereby instructed to make appropriate noting in the Register of Directors accordingly and file Form No. 32 with the Registrar of Companies.
In a board meeting resolutions are passed with simple majority.
special or ordinary resolutions are required only in the case of shareholder meeting.
No need to pass specific resolution for resignation. However noting in the BM minutes would be enough.
Resolution--Taking note of Resignation of Director
RESOLVED THAT the resignation of Mr. Pallav jain, Director of the Company, be and is hereby accepted with effect from the 26th day of the June, 2001 and that the Secretary of the Company be and is hereby instructed to make appropriate noting in the Register of Directors accordingly and file Form No. 32 with the Registrar of Companies.
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