Inclusion of new partner - SHARE TRANSFER FORM REQUIRED?

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This discussion clarifies whether a share transfer form is required when a new partner is added to a partnership firm that is a shareholder in a private limited company. Generally, if the shares are held solely by the partnership, only an updated partnership deed is necessary, not a share transfer form. However, if the shares are jointly held in the names of partners, a share transfer form (SH-4) might be required.

Kavita R

Kavita R (Querist)

19 August 2022 In a Private limited company there are 4 shareholders including a partnership firm. And now the composition of partnership firm has been changed and a new partner has been included. My query is whether we have to fill a new share transfer form for inclusion of the new partner ? And what if the partner is the director of that pvt. ltd. i.e what will be the consequence? Pls advise asap.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 August 2022 No share transfer form required as it's partner addition to partnership firm. Only deed of partnership for adding partner is required.
No consequence.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

19 August 2022 If shares are issued by the Pvt Ltd Co in the joint names of the partner's, share transfer is required for which form SH-4 has to be filed.

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