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. E-Tax Book Solutions can help you transfer shares of a private limited company by completing the necessary procedures as per Companies Act, 2013.
Reasons to Share Transfer