Shares

Yes, If it is public company and with the consent of other members if its is private company.

The procedure for registration of shares gifted is same as the procedure for a normal transfer. The stamp duty payable for registration of gifted shares would be @ 25 paise for every100 or part thereof, of the face value or the market value of the shares prevailing as on the date of the document, if any, conveying the gift or the date of execution of the transfer deed, whichever is higher.

ALSO, Company can also gift shares, if you are talking about issuing shares as gift ... that is without consideration,,, then it will attract provisions of Sweat Equity Shares...

Regards

Jaideep Pandya

Hi,

Just to add in the reply of Mr Jaideep, that for private company,  in case of gift to a relative, no consent of other members is required.

best regards

CS Ashwini Kumar

Dear friends,
The main legal provisions under different Acts are as under:

1) As per Sec.291 of Companies Act, Board has power to do all such acts as the company is authorised to do, unless such act is specifically required to be done in general meeting only. Since there is no specific provision requiring permission of general meeting for gifts, directors are empowered for the same. (Company can very well give gift on the occasion of marriage of its company secretry!!)

2) As per Section 25 of Contract Act, an agreement without consideration is void unless it is in writing and registered.

3) As per Section 123 of Transfer of Property Act, property in movable things (which includes shares) can be transferred either by registered instrument or by delivery.

Also, From accounting perspective and Accounts related provisions of the Companies Act, gifting of shares by a company should be justified in terms of ‘true and fair’ positions in balance sheet as it disposing off the investment without consideration. However in case of closely held company, with consent of all the shareholders, the Company can gift its investment in shares. It is in fact gift by individual shareholders through the company controlled by them

Hence in view of above I feel company can gift the shares. However, the directors are acting as an agent of its members and hence must justify their action in the interest of the company. But being void, the agreement cannot be enforced in court of law unless registered under Registration Act.

Also to mention; AAA Project Ventures Private Limited gifted shares of Reliance Power Limited to Reliance Infrastructure Limited.

Source: 15th  Annual Report: Directors Report - Reliance Power Ltd. - March 31, 2009.

Other vies solicited.