Share Transfer & Capital Changes

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Share Transfer & Capital Changes

Share transfers, private placement, rights issue, bonus shares, and authorized capital increase — all equity-related MCA filings handled with proper documentation.

Changes in the ownership structure of a company — whether transferring existing shares between parties, issuing new shares through private placement, or increasing authorized capital — are significant corporate events that require precise documentation, board and shareholder resolutions, and timely MCA filings. Errors in share transfer documentation can create title disputes and compliance complications.

Share Transfer

The transfer of shares from one shareholder to another in a Private Limited Company requires a formal process — a share transfer is not complete without the correct paperwork.

Share Transfer Deed (Form SH-4) — signed by both transferor (seller) and transferee (buyer)
Board resolution — approving the transfer — required in most cases
Share certificate cancellation — and reissue in the transferee's name
Stamp dutyon the transfer deed — typically 0.25% of consideration or face value, whichever is higher
For NRI/foreign transferee — Form FC-TRS must be filed with RBI under FEMA — we handle this

Private Placement of Shares

Private placement is the most common route for raising equity investment in India — used by startups raising funding rounds. It involves issuing new shares to a selected group of investors.

Board resolution approving the private placement
Shareholder approval by special resolution
Offer letter and subscription agreement drafted and issued to investors
Application money collection in separate bank account
Allotment within 60 days of receipt of application money
Form PAS-3 filed with MCA within 30 days of allotment
Share certificates issued within 2 months of allotment

Authorized Capital Increase

If your company needs to issue more shares than the current authorized capital allows, the authorized capital must first be increased through a shareholder resolution and Form SH-7 filing.

Board resolution Calling EGM to pass special resolution for capital increase
Special resolution Passed by shareholders with 75%+ majority
Form SH-7 Filed with MCA within 30 days of special resolution
Government fee Scales with the amount of increase — ranges from Rs. 1,000 to Rs. 2,00,000+

Frequently Asked Questions

01 Can shares of a Pvt Ltd company be freely transferred?

No — the Articles of Association of a Pvt Ltd company typically restrict share transfer. Most AOAs require the transferor to first offer the shares to existing shareholders (right of first refusal) before transferring to an outsider. We review your AOA and document the transfer correctly.

02 Is stamp duty applicable on share transfers?

Yes — stamp duty of 0.25% of the consideration (or face value, whichever is higher) is payable on the share transfer deed. Since 2020, stamp duty on securities is collected by the stock exchange/depository for listed securities; for unlisted securities, physical stamp is required.

03 What is Form FC-TRS and when is it required?

Form FC-TRS must be filed with RBI when shares are transferred between a resident and a non-resident (in either direction). It must be filed within 60 days of receipt of consideration. Failure to file attracts penalties under FEMA.

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