Share Transfer Certificate – Meaning, Importance and Format

Introduction

Transfer of shares is a common corporate activity, especially in private limited companies and unlisted public companies. Whenever shares are transferred from one shareholder to another, the company must formally recognize and record such transfer. For this purpose, a Share Transfer Certificate is issued, serving as official proof of change in ownership.

This article explains the meaning, legal framework, importance, and a standard format of a Share Transfer Certificate in a simple and professional manner.

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What is a Share Transfer Certificate?

A Share Transfer Certificate is a document issued by a company certifying that the ownership of shares has been transferred from the transferor (existing shareholder) to the transferee (new shareholder) and that the transfer has been duly approved and registered by the company.

It confirms that:

• The share transfer complies with the Companies Act, 2013
• The Board of Directors has approved the transfer
• The Register of Members has been updated
• A new share certificate has been issued in the transferee’s name

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Legal Provisions Governing Share Transfer

Share transfer in India is governed by:

• Section 56 of the Companies Act, 2013
• Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014

As per these provisions:

• The instrument of transfer (Form SH-4) must be duly stamped and executed
• Share transfer must be registered within 60 days from receipt of documents
• The company must issue the share certificate after approval

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When is a Share Transfer Certificate Issued?

A Share Transfer Certificate is issued after:

• Receipt of duly executed Form SH-4
• Submission of original share certificate
• Verification of stamp duty payment
• Approval of transfer by the Board of Directors
• Entry of transferee’s name in the Register of Members

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Importance of Share Transfer Certificate

• Acts as legal evidence of share ownership
• Ensures statutory compliance under company law
• Required for future transfer or transmission of shares
• Important for audit, due diligence, and corporate records
• Confirms entitlement to dividends and voting rights

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Documents Required for Share Transfer

1. Duly executed Form SH-4
2. Original Share Certificate
3. Board Resolution approving the transfer
4. Proof of payment of applicable stamp duty

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Share Transfer Certificate – Format

SHARE TRANSFER CERTIFICATE

(Issued pursuant to Section 56 of the Companies Act, 2013)

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This is to certify that the equity shares described below have been duly transferred and registered in the name of the transferee in accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company.

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Name of the Company: _________________________________ Limited
CIN: _________________________________
Registered Office: _________________________________________________

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Share Transfer Details

Particulars	Details
Name of the Transferor	_________________________________
Name of the Transferee	_________________________________
Folio Number	_________________________________
Old Share Certificate Number	_________________________________
New Share Certificate Number	_________________________________
Distinctive Numbers	From ____________ To ____________
Number of Shares	_________________________________
Face Value per Share	₹ ____________
Date of Transfer	_________________________________

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The transfer of the above-mentioned shares was approved by the Board of Directors of the Company at its meeting held on ______________, and the name of the transferee has been duly entered in the Register of Members of the Company.

The earlier share certificate(s) issued in the name of the transferor stand cancelled and this certificate is issued in lieu thereof.

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Place: ___________________
Date: ___________________

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For _______________________________ Limited

(Common Seal of the Company, if applicable)

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Key Points to Remember

• Applicable mainly for physical share transfers
• Not required for dematerialised shares
• Must be issued within the prescribed statutory timeline
• Proper maintenance of statutory registers is mandatory

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Conclusion

A Share Transfer Certificate is a vital corporate document that legally confirms the transfer of ownership of shares. Companies must ensure that share transfers are processed strictly in accordance with the Companies Act, 2013 to avoid non-compliance and disputes. Using a proper format and following due procedure ensures transparency, accuracy, and legal validity.