The Board of Directors has the authority to refuse registration of transfer of shares. A member may appeal to the NCLT against the refusal by the Board within a period of thirty days from the date of receipt of the refusal notice.
Once a proper instrument of transfer (such as a stock transfer form) that has been executed and stamped has been delivered to the company whose shares are being transferred, the directors will either refuse or approve the registration of the transfer.
Refusal by company
If a private limited company refuses to register the transfer of shares, it shall send a notice of refusal to the transferor and the transferee or to the person giving intimation of such transfer within thirty days from the date on which the instrument of transfer was delivered to the company.
Restriction on transfer
Section 2(68) of the Companies Act 2013 provides that the Articles of a private company shall restrict the right to transfer the company’s shares. This restriction is binding upon the company and members thereof.
Statutory Remedy Against Refusal to Transfer Shares Under Section 58 of the Companies Act 2013. The process to be followed by the shareholders, if the company refuse to transfer their shares. The power can be exercised by the shareholders as per the provisions of section 58 of the Companies Act, 2013.
4 Transferable and freely tradable shares. Being able to sell their shares to the public allows public limited companies to raise capital much more easily than private limited companies. … Public limited companies must publicly disclose more information than private companies.
As per Section 2(68) of Companies Act, 2013 Private Company restricts the transfer of shares and prohibit invitation to public to subscribe to any securities of the Company. … Transfer without consideration is Void: Share transfer without consideration is void.
Beck v Tuckey. In Beck v Tuckey, Brereton J of the Supreme Court of New South Wales stated that a company is prohibited from registering a transfer until a “proper instrument of transfer” is delivered to it.
Step 1: Obtain share transfer deed in the prescribed format. Step 2: Execute the share transfer deed duly signed by the Transferor and Transferee. Step 3: Stamp the share transfer deed as per the Indian Stamp Act and Stamp Duty Notification in force in the State.
What is Section 62 of Companies Act 2013?
“The notice referred to in sub-clause (i) of clause (a) of sub-section (1) shall be dispatched through registered post or speed post or through electronic mode or courier or any other mode having proof of delivery to all the existing shareholders at least three days before the opening of the issue.”