The ownership of a company limited by shares is held by the shareholders of the Company. The shareholders in turn appoint Directors to manage the affairs of the Company. Hence, ownership of a company rests with the shareholders and not the Directors. Transfer of ownership of a company can therefore be accomplished by transferring shares of the company from one person or entity to another. Share transfer in a private limited company is usually more restricted when compared to a listed company that is publicly traded. The entire shares of a private limited company are usually owned by a family or a small group of persons or entities. 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. Therefore, it is important to review the Articles of Association of the Company prior to effecting a share transfer. Monitrix can help you transfer shares of a private limited company by completing the necessary procedures as per Companies Act, 2013.
Shareholders are the legal owners of the shares of a company. Shareholders can be natural persons or corporate entities. They can also be NRIs or Foreign Nationals or Foreign Entities. Shareholders are the owners of a Company.
Directors of a company are appointed by the shareholders of a company to manage the affairs of a company. Directors are not owners of a company. However, Directors can also be shareholders and shareholders can also be Directors.
Articles of Association
The articles of association of a company defines the rights and responsibilities of shareholders and Directors. Articles of Association of a company can restrict the share transfer in a private limited company.
STEPS INVOLVED IN SHARE TRANSFER
1. Share Transfer Process
Monitrix can help you transfer shares of a private limited company in about 2 to 3 weeks.
A Business Expert will review the present shareholding of the Company and the Articles of Association to understand the background of the Company prior to beginning the process. The review would take 1 - 3 working days.
3. Document Preparation
The necessary documents are will be prepared by an Expert for transferring shares of the company from one person or entity to another. Documents will be prepared by the Expert in 3 - 5 working days depending on complexity.
4. Share Issue
Based on the share transfer documentation submitted to the Company, an Expert will help prepare the necessary documentation for accepting the share transfer and issuing of shares to the new shareholder in 5 - 10 working days.
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