The shareholders are the owners of a company limited by shares who are vested with wide powers of controlling the Company like appointment and removal of Directors, approval for bringing additional funds and the approval of related party transactions etc. Transfer of ownership of a company can therefore be affected by transferring the shares held by one member to another. Share transfer in a Private Limited Company is usually more restricted in compared to a Public Limited Company.

Transfer of ownership of a company can therefore be affected by transferring the shares held by one member to another. Share transfer in a Private Limited Company is usually more restricted compared to a Public Limited Company. In the case of a Private Limited Company, the shares are closely held by either a small group of persons, family members or friends, etc. Hence, most of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider.

Following is the procedure of share transfer:

Step 1: Fill up and execute the share transfer form in Form SH-4

Step 2: Pay the stamp duty on the form SH-4 by affixing the share transfer Stamps of 0.25% of the total consideration amount involved in the share transfer

Step 3: Deliver the SH-4 at the registered office of the Company

Step 4: Pass the Board Resolution for approval of share transfer

Step 5: Make necessary entries in the register of Members and register of share transfer

Step 6: Make necessary endorsement at the back of the share certificate and hand over the same to the transferee.