A member of PVT ltd company intends to transfer shares to an outsider for nil consideration. if it is possible ? what is the procedure ? what are the sections to be checked?
Replied 10 March 2016
First verify articles of association of company, general private limtied company articles has restriction on transferability of shares, first they should give option to existing sharehodlers to purchasing shares.
if no such restriction, he can transfer to third party at nil price, but income tax point of view, it will be taxed in hands of transferee.
Section 56 deals with transfer and transmission of securiteis.