Share Transfer Form
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 January 2011
Pls let me know, what are the penal provisions if the Share Transfer Form does not have the Government of India & Date stamp affixed on it...
will d transfer on such share transfer form will be valid???
will d transfer on such share transfer form will be valid???
13 January 2011
If date is not endorsed, the instrument is 'not complete' as per section 108(10 of the Companies Act,1956 ,meaning thereby it is a case of bad delivery and the company would be entitled to refuse the registration of transfer.
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 January 2011
can anything to be done, to make the transfer of shares valid???
25 July 2025
If a **Share Transfer Form (Form 7B)** (under the **Companies Act, 1956**) does **not bear the stamp duty or date of execution**, it is considered **incomplete and invalid**, making the transfer **legally ineffective**.
---
### 📌 Key Legal Reference:
**Section 108 of the Companies Act, 1956** (now replaced, but still relevant for legacy cases) required that:
* The **transfer instrument must be duly executed**, dated, and **stamped as per the Indian Stamp Act**.
* **Failure to affix proper stamp duty** or date makes the instrument **defective**.
* The company is within its rights to **refuse registration of transfer** on that basis.
---
### ⚠️ Consequences of Missing Stamp & Date:
1. **Transfer is invalid**: The company can **refuse to register** the transfer.
2. **Stamp duty evasion**: If unstamped, it may be considered an attempt to evade stamp duty — a punishable offense under the **Indian Stamp Act, 1899**.
3. **Penalties**:
* **Fine** up to **₹5,000** or more depending on jurisdiction (under the Stamp Act).
* Potential demand for **payment of deficit stamp duty + penalty** (often 10x the deficit).
---
### ✅ What Can Be Done Now?
If the transfer has **not yet been registered** by the company:
1. **Cancel the defective form**.
2. **Execute a fresh share transfer deed (SH-4)** if the current date still falls within 60 days of execution.
* If the 60 days has lapsed: you must reinitiate the transfer process (new deed, new date).
3. **Affix appropriate stamp duty** on the new deed (generally 0.25% of the consideration or fair market value of shares — varies by state).
4. Submit the **duly stamped and dated** deed to the company for transfer registration.
---
### 📝 Note:
* **Retrospective stamping** is not permitted under most state stamp laws. The deed must be stamped **on or before execution** or within the time prescribed under local stamp laws.
* If this issue came up post-Companies Act, 2013 (i.e., after 1 April 2014), then **Form SH-4** applies, not Form 7B.
---
Would you like a sample of the correct way to execute and stamp a share transfer deed (SH-4)?
---
### 📌 Key Legal Reference:
**Section 108 of the Companies Act, 1956** (now replaced, but still relevant for legacy cases) required that:
* The **transfer instrument must be duly executed**, dated, and **stamped as per the Indian Stamp Act**.
* **Failure to affix proper stamp duty** or date makes the instrument **defective**.
* The company is within its rights to **refuse registration of transfer** on that basis.
---
### ⚠️ Consequences of Missing Stamp & Date:
1. **Transfer is invalid**: The company can **refuse to register** the transfer.
2. **Stamp duty evasion**: If unstamped, it may be considered an attempt to evade stamp duty — a punishable offense under the **Indian Stamp Act, 1899**.
3. **Penalties**:
* **Fine** up to **₹5,000** or more depending on jurisdiction (under the Stamp Act).
* Potential demand for **payment of deficit stamp duty + penalty** (often 10x the deficit).
---
### ✅ What Can Be Done Now?
If the transfer has **not yet been registered** by the company:
1. **Cancel the defective form**.
2. **Execute a fresh share transfer deed (SH-4)** if the current date still falls within 60 days of execution.
* If the 60 days has lapsed: you must reinitiate the transfer process (new deed, new date).
3. **Affix appropriate stamp duty** on the new deed (generally 0.25% of the consideration or fair market value of shares — varies by state).
4. Submit the **duly stamped and dated** deed to the company for transfer registration.
---
### 📝 Note:
* **Retrospective stamping** is not permitted under most state stamp laws. The deed must be stamped **on or before execution** or within the time prescribed under local stamp laws.
* If this issue came up post-Companies Act, 2013 (i.e., after 1 April 2014), then **Form SH-4** applies, not Form 7B.
---
Would you like a sample of the correct way to execute and stamp a share transfer deed (SH-4)?
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