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???

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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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???

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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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**.

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### 📌 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.

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### ⚠️ 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).

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### ✅ 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.

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### 📝 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.

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Would you like a sample of the correct way to execute and stamp a share transfer deed (SH-4)?

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