transfer of shares

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Kamna Tiwari (Querist)
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25 September 2010 hi,
A shareholder of the company wishes to sell his shares to the Managing Director who is also the shareholder of the company.
what shall be the consideration that is to be paid for such transfer.

i Fell it shall be EPS(earning per share)...i.e. net worth / no. of shares of the company
Now as the company is a public unlisted company so no question of market price arises so in that case it shall be EPS only

Kindly tell me if i am right? In case i m not plzz guide me with the suitable solution to my query... i also which to know the tax to be paid by the transferee/or for the above transaction?

Thankz in anticipation

CS KAMNA TIWARI

Ajay Mishra

Ajay Mishra (Expert)
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25 September 2010
Ms. Kamna

In case of transfer of shares of unlisted public company can opt Pricing Guideline issued by RBI.
As per this, in case of unlisted public company the pricing of shares will be:

a priced based on EPS linked to to the Price Earning (PE) multiple or a price based on the Net Asstes Value (NAV) linked to the book value multiple, whichever is higher.

Regards