Transfer of shares
means an act of transfer of title of share certificate from one person (transferor) to another person (transferee). If shares are held in physical form (paper) then as per section 108 of companies act, 1956, valid transfer deed (duly filled & stamped) is compulsory for transfer mentioning all necessary information like name and address of both the parties along with share certificate.
There can be issues when the shares are sold. The issues can be like:
- Signatures not matching in the pre-demat period: Sometimes companies deny the transfer of shares due to mismatch of the signature of the transferor in the transfer deed and specimen signature available in company records.
- The buyer has paid the consideration but has not submitted the transfer deed with the company. Consequently, as per the company records, the shares still remain in the seller’s name.
- Loss of share certificates: Many times it happens that one person losses shares share certificates then in this condition he has to approach the company and request them to issue the duplicate share certificate in his/her name.
- Mutilated share certificates: Due to wear and tear nature of the share certificates sometimes they mutilated hence cause problem in share transfer.