Private Party sales of shares from a director to an employee

For a private ltd company, if the director of the company (( who own 100% at the moment)) wishes to sell to sell 5% of his shares to an employee of the same company - what formalaties need to be followed ?

Do any of the existing articles of the company have to be ammended ?

If this process has to be repeated for other employees in future, are there any upper percentages to be mindful of so that the directors  do not run into any blocking situations during shareholder votes ( i.e as long as directors have more than X percentage ... )

Thank you for any guidance

 

Replies (3)

When the director/shareholders want to sell the share to employee or any other person, then it can be called as a transfer of shares.


And for transfer of shares, there is no need to alter the articles.



Originally posted by :Ankur Shah (PCS)
" When the director/shareholders want to sell the share to employee or any other person, then it can be called as a transfer of shares.



And for transfer of shares, there is no need to alter the articles.



"

 

Thank you.  Are there any disclosures to be filed with the MCA or any other body or with any annual tax filings, or is this something that the company just needs to maintain in its books ? Does the CA have to certify it etc ?

 

Transfer is something which is to be maintained by the company.


However, The transfer details will be included in the Annual Return (20B).


There is no need to certify the transfer by CA/CS.

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