No Money and No SH-4

Company cannot add Shareholder to the balance sheet. Wrong concept.

It is a non-compliance of Section 56 of the Companies Act, 2013. The same shall be communicated to the auditors to remove the name from list of shareholders in Balance sheet.

Transferor and Transferee has to sign SH -4 for physical transfer of security ,company will only check the veracity of submission and either approve or reject it ,if its by gift deed then due course of law shall be followed , and new shareholder name will be entered in ROM in MGT-1 ,there is no concept of adding shareholders to balance sheet ,list of shareholders as on 31.03 is an annexure to MGT-7 ( annual return ) , Balance sheet represents capital of company in numerical value , subsequent inter se transfer will never affect that no unless otherwise capital base increased or reduced !

Share Transfers is a very important matter in the working of Companies. This practice is commonly seen in Private Limited but is very dangerous. You must prepare a proper MGT-1 since incorporation and work for shares transfers following the procedures like SH-4, Board Resolution, Share purchase agreement, Movement of funds