Transfer of shares & alteration in MOA AOA.
This query is : Resolved
28 December 2016
Dear,
In case of a private company, a director (who is also subscriber to moa & aoa) is going to resign from company. Also he wants to transfer his holding to other existing subscribers.
My querry is:
1. whether that will be case of alteration in moa & aoa due to change in list of subscribers. if yes , how compliances would be done?
2. How transfer of shares would be done along with comliances?
3. Any other suggestions to tackle above case to remove one director (also subscriber) from company.
Thanks in advance!
28 December 2016
1. It is not a case to alter MOA and AOA.
2. Subscriber to MOA can transfer shares using form SH-4 according to the decision taken in board meeting.
2. Subscriber to MOA can transfer shares using form SH-4 according to the decision taken in board meeting.
Message likes :
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28 December 2016
sir,
if i am not wrong, there would be following comliances:
1. Filling of DIR-11,12 (for director resignation).
2. Transfer through SH-4.
3. Reporting in boards report.
4. All resolutions through board meeting.
5. issue of fresh share certificate.
Please correct me if required.
28 December 2016
1, 2,3 and 4 o.k
5. No need of fresh share certificate. Endorsement of transfer overleaf of original certificate is enough.
1, 2,3 and 4 o.k
5. No need of fresh share certificate. Endorsement of transfer overleaf of original certificate is enough.
Message likes :
1 times
28 December 2016
Please elaborate how practically endorsement of transfer overleaf can be made? whether stamps payment would require? whether this can be made through dsc signature?
Thanks in advance!
02 August 2025
Great questions! Here's a practical explanation and step-by-step guide regarding your queries about **transfer of shares by a resigning director who is also a subscriber to MOA/AOA**, and whether MOA/AOA alteration is required:
---
### 1. **Is alteration of MOA or AOA required?**
* **No**, there is **no need to alter the MOA or AOA** just because a director (who is also a subscriber to MOA/AOA) resigns and transfers his shares.
* The **list of subscribers to MOA is fixed at the time of incorporation** and not updated after that.
* Changes in shareholding are reflected in the **Register of Members** but do **not** affect the MOA subscriber list.
* Similarly, AOA changes are only needed for alteration of share capital or share rights, not for change of shareholders/directors.
---
### 2. **Transfer of Shares & Compliances**
**Procedure:**
* **Share Transfer Deed (Form SH-4):**
* The transferor (resigning director) and transferee (existing subscriber or other person) execute Form SH-4.
* Stamp duty is payable on the transfer deed as per state laws on the **consideration value** of shares transferred.
* **Board Meeting & Approval:**
* Convene a Board Meeting to approve the share transfer (if the Articles require it).
* Pass Board Resolution approving the transfer and issue new share certificates or endorse transfer on original share certificate.
* **Share Certificate:**
* Instead of issuing a fresh certificate, **endorsement on the back (overleaf) of the original share certificate** is permitted for transfer of shares.
* The endorsement must be signed by the transferor and transferee and stamped with applicable stamp duty.
* Digital signatures (DSC) cannot be used on physical share certificates. DSC is used only for electronic filings.
* **Update Register of Members:**
* Update the company’s Register of Members to reflect the new ownership.
* **Filing with ROC:**
* File **Form DIR-11** (for director resignation).
* File **Form DIR-12** (for change in director).
* File **Form MGT-7** and include disclosure in the Board’s report about share transfer and director changes.
* File **Form PAS-3** (Return of allotment) if applicable (usually not needed for transfer of existing shares).
---
### 3. **Director Resignation**
* Director resignation requires a written notice and Board acceptance.
* File **DIR-11** within 30 days of resignation.
* File **DIR-12** for the change in director status.
* Update Director details in Register of Directors.
---
### 4. **Stamp Duty on Share Transfer**
* Stamp duty must be paid on **Form SH-4** as per the value of shares transferred (usually at a rate prescribed by the Stamp Act applicable in your state).
* The stamp must be affixed on the share transfer deed or on the endorsement on the back of the share certificate.
* Without proper stamp duty, transfer may not be legally valid.
---
### 5. **Use of DSC**
* **Digital Signature Certificate (DSC) is not applicable for physical endorsement on share certificates.**
* DSC is used for signing electronic documents filed with the Registrar of Companies (ROC).
---
### **Summary:**
| Step | Action/Document |
| ------------------- | ------------------------------------------------------------------------- |
| MOA/AOA alteration? | No need |
| Share transfer | Execute Form SH-4 with stamp duty |
| Board approval | Hold Board Meeting, pass resolution |
| Share certificate | Endorse transfer on original share certificate or issue fresh certificate |
| Update registers | Register of Members & Directors |
| ROC filings | DIR-11, DIR-12, MGT-7 |
| Stamp duty | Pay on transfer deed or endorsement |
| DSC usage | For electronic filings only, not physical docs |
---
If you want, I can draft a sample **Board Resolution** and **Share Transfer Deed** format or guide you on stamp duty rates for your state. Just let me know!
---
### 1. **Is alteration of MOA or AOA required?**
* **No**, there is **no need to alter the MOA or AOA** just because a director (who is also a subscriber to MOA/AOA) resigns and transfers his shares.
* The **list of subscribers to MOA is fixed at the time of incorporation** and not updated after that.
* Changes in shareholding are reflected in the **Register of Members** but do **not** affect the MOA subscriber list.
* Similarly, AOA changes are only needed for alteration of share capital or share rights, not for change of shareholders/directors.
---
### 2. **Transfer of Shares & Compliances**
**Procedure:**
* **Share Transfer Deed (Form SH-4):**
* The transferor (resigning director) and transferee (existing subscriber or other person) execute Form SH-4.
* Stamp duty is payable on the transfer deed as per state laws on the **consideration value** of shares transferred.
* **Board Meeting & Approval:**
* Convene a Board Meeting to approve the share transfer (if the Articles require it).
* Pass Board Resolution approving the transfer and issue new share certificates or endorse transfer on original share certificate.
* **Share Certificate:**
* Instead of issuing a fresh certificate, **endorsement on the back (overleaf) of the original share certificate** is permitted for transfer of shares.
* The endorsement must be signed by the transferor and transferee and stamped with applicable stamp duty.
* Digital signatures (DSC) cannot be used on physical share certificates. DSC is used only for electronic filings.
* **Update Register of Members:**
* Update the company’s Register of Members to reflect the new ownership.
* **Filing with ROC:**
* File **Form DIR-11** (for director resignation).
* File **Form DIR-12** (for change in director).
* File **Form MGT-7** and include disclosure in the Board’s report about share transfer and director changes.
* File **Form PAS-3** (Return of allotment) if applicable (usually not needed for transfer of existing shares).
---
### 3. **Director Resignation**
* Director resignation requires a written notice and Board acceptance.
* File **DIR-11** within 30 days of resignation.
* File **DIR-12** for the change in director status.
* Update Director details in Register of Directors.
---
### 4. **Stamp Duty on Share Transfer**
* Stamp duty must be paid on **Form SH-4** as per the value of shares transferred (usually at a rate prescribed by the Stamp Act applicable in your state).
* The stamp must be affixed on the share transfer deed or on the endorsement on the back of the share certificate.
* Without proper stamp duty, transfer may not be legally valid.
---
### 5. **Use of DSC**
* **Digital Signature Certificate (DSC) is not applicable for physical endorsement on share certificates.**
* DSC is used for signing electronic documents filed with the Registrar of Companies (ROC).
---
### **Summary:**
| Step | Action/Document |
| ------------------- | ------------------------------------------------------------------------- |
| MOA/AOA alteration? | No need |
| Share transfer | Execute Form SH-4 with stamp duty |
| Board approval | Hold Board Meeting, pass resolution |
| Share certificate | Endorse transfer on original share certificate or issue fresh certificate |
| Update registers | Register of Members & Directors |
| ROC filings | DIR-11, DIR-12, MGT-7 |
| Stamp duty | Pay on transfer deed or endorsement |
| DSC usage | For electronic filings only, not physical docs |
---
If you want, I can draft a sample **Board Resolution** and **Share Transfer Deed** format or guide you on stamp duty rates for your state. Just let me know!
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