But in case of a private company directors may compel the shareholder to transfer shares at a fair price determined by directors or the company’s auditors. Reason being in a private company shares are not freely transferable. In Companies Act, there is no issue on transfer of shares to director.
A share cannot be issued on terms a shareholder will pay the company less than that nominal value for the share. … However, shares can be issued for more than their nominal value – ie on terms the shareholder pays a ‘premium’.
With respect to shares held with NSDL or CDSL depositories, offline procedure for transfer of shares through off-market transfer is possible. One needs to fill out a DIS (Delivery Instruction Slip).
Shares are like any other form of property, they can be transferred between individuals at any time. This can be done because of several reasons: The shareholder has died. … They wish to gift shares to family members.
Difference between face value and market value:
|Face value||Market Value|
|It can not be calculated as the face value is determined by the company||Market value can be calculated by dividing the total value of the company in the market with the total number of shares issued.|
What happens when face value is increased?
For one, it increases the number of shares outstanding. A company with shares of Rs 10 would have 10 times more shares if the face value were to be reduced to Re 1. This would increase direct and indirect costs associated with managing more shares, which a company may not be willing to bear.
You can transfer shares for nominal value when you want to gift them to someone or something (e.g. a family member or friend, or a family trust), if giving away shares to a co-founder in very early stages of the company (i.e. before you have really started).
Transfer of shares refers to the intentional transfer of title of the shares between the transferor (one who transfers) and the transferee (one who receives). … The shares of a private limited company are not transferable subject to certain exceptions. A transfer deed is executed for the transfer of shares.
Nominal values may be issued arbitrarily to common stock and recorded on a company balance sheet. These funds are invested directly in the company that issued the stock as a means of infusing cash into the business.
Shares or debentures are movable property. They are transferable in the manner provided by the articles of the company, especially, the shares of any member of a public company. The transfer of securities is possible through any contract or arrangement between two or more persons.
According to section 62(1)(c) of the Act, a company can issue shares to any persons, if it is authorised by a special resolution, either for cash or for consideration other than cash, if the price of such shares is determined by the valuation report and any other conditions as may be prescribed.
Yes, you can transfer shares from any account to your account by giving off-market delivery instructions slip to holders DP. There are some minimum charges to transfer the shares. As you are doing the transfer of shares within a family, so we don’t see any major issue from the income tax department.
Is a stock transfer form necessary?
There is no need to provide Companies House with copies of stock transfer forms. However, the director should update the company’s statutory register of shareholders to record the details of any share transfers.
Process of transfer of shares from one Demat account to another
- Step 1 – The investor fills the DIS (Delivery Instruction Slip) and submits it to the current broker.
- Step 2 – The broker forwards the DIS form or request to the depository.
- Step 3 – The Depository will transfer your existing shares to the Demat account.