Company Share Transfer.
The ownership of a company limited by shares is held by the shareholders of the Company. The shareholders in turn appoint Directors to manage the affairs of the Company. Hence, ownership of a company rests with the shareholders and not the Directors. Transfer of ownership of a company can therefore be accomplished by transferring shares of the company from one person or entity to another. Share transfer in a private limited company is usually more restricted when compared to a listed company that is publicly traded. The entire shares of a private limited company are usually owned by a family or a small group of persons or entities. Hence, most of the Articles of Association of a Private Limited Company limit the right of a shareholder to transfer the company's shares to an outsider. Therefore, it is important to review the Articles of Association of the Company prior to effecting a share transfer. IndiaFilings can help you transfer shares of a private limited company by completing the necessary procedures as per Companies Act, 2013.
HIGHLIGHTS OF SHARE TRANSFER.
Shareholders are the legal owners of the shares of a company. Shareholders can be natural persons or corporate entities. They can also be NRIs or Foreign Nationals or Foreign Entities. Shareholders are the owners of a Company.
Directors of a company are appointed by the shareholders of a company to manage the affairs of a company. Directors are not owners of a company. However, Directors can also be shareholders and shareholders can also be Directors.
Articles of Association
The articles of association of a company defines the rights and responsibilities of shareholders and Directors. Articles of Association of a company can restrict the share transfer in a private limited company.