SHARE CAPITAL AND NATURE, NUMBERING AND

CERTIFICATE OF SHARES, TRANSFER OF SHARES AND

OTHER SECURITIES.
Numbering of shares. Sec 60
o Every share in a company having a share capital shall be distinguished by its distinctive
number
o This section shall apply to a share held by a person whose name is entered as holder of
beneficial interest in such share in the records of a central depository system.

Nature of shares or other securities. Sec 61

o The shares or other securities of any member in a company shall be movable property
transferable in the manner provided by the articles of the company.

Shares certificate to be evidence. Sec 62

o A certificate, if
a) issued in physical form under common seal of the company or under official seal , or
b) issued in book-entry form, specifying the shares held by any person or shares held in
central depository system
shall be prima facie evidence of the title of the person to such shares.
Transfer of shares and other securities
 Application for
Transfer of
Shares/Securities

Transfer to
Accept Transfer Refusal of Successor-in-
Transfer Deed Lost transfer interest/Nominee
of Deceased

Issue and Give Prove Give notice

Deliver Share that transfer of refusal
certificate was made with reason

Change in Give File an appeal

May accept
the register Indemnity refusal
against refusal to
of member commission
then transfer
Transfer of shares and other securities Sec 74
o An application for registration of transfer of shares and other transferable securities may be
made to the company either by the transferor or the transferee.
o Application must be
a) along with proper instrument of transfer
b) duly stamped and executed by the transferor and the transferee

o The company shall within 15 days after the application complete the process and
a) ensure delivery of the certificates to the transferee at his registered address; and
b) enter in its register of members the name of the transferee.

o The company shall within 10 days after an application of transfer is made for the registration
of the transfer of any shares or other securities to a central depository, register such transfer in
the name of the central depository
Transfer deed lost, destroyed or mutilated

o Where a transfer deed before its lodgment is

a) lost,
b) destroyed or
c) mutilated,
the company may register the transfer of shares or other securities
i. on an application made by the transferee
ii. application must bearing the stamp required by an instrument of transfer and
iii. the transferee must proves to the satisfaction of the board that the transfer deed duly
executed has been lost, destroyed or mutilated.
o Before registering such transfer of shares or other securities, the company may demand such
indemnity as it may think fit.
Register of Transfers
o Every company shall maintain at its registered office a register of transfers of shares and other securities.
o such register shall be open to inspection by the members and supply of copy thereof in the manner stated in
section 124.
o Nothing shall prevent a company from registering as shareholder or other securities holder a person to whom the
right to any share or security of the company has been transmitted by operation of law.
o Any violation of this section shall be an offence liable to a penalty of level 2 on the standard scale.

Board not to refuse transfer of shares Sec 75

o The board shall not refuse to transfer any shares or securities unless the transfer deed is, for any reason,
defective or invalid.
o The company shall within 15 days or, where the transferee is a central depository, within five 5 days from the
date on which the instrument of transfer was lodged with it notify the defect or invalidity to the transferee.
o The transferee shall, after the removal of such defect or invalidity, be entitled to re-lodge the transfer deed with
the company.
Notice of refusal to transfer. Sec 77
o If a company refuses to register a transfer of any shares or other securities, the company
shall, within 15 days after the date on which the instrument of transfer was lodged with
the company, send to the transferee notice of the refusal indicating reasons for such
refusal
o Any failure of the company to give notice of refusal after the expiry of the period shall be
deemed refusal of transfer.
o Any violation of this section shall be an offence liable to a penalty of level 2 on the
standard scale
Appeal against refusal for registration of transfer Sec 80
o The
a) transferor or
b) transferee, or
c) the person who gives intimation of the transmission by operation of law,
as the case may be, aggrieved by the refusal of transfer may appeal to the Commission within
a period of sixty 60 days of the date of refusal.
o The Commission shall, provide opportunity of hearing to the parties concerned
o The Commission may, by an order in writing, direct that the transfer or transmission should be
registered by the company
o the company shall give effect to the decision within fifteen 15 days of the receipt of the order.
o The Commission may also give such incidental and consequential directions as to the payment
of costs or otherwise as it deems fit.
o If default is made in giving effect to the order of the Commission within the period specified
every director and officer of the company shall be liable to a penalty of level 3 on the standard
scale.
Restriction on transfer of shares by the
members of a private company
Restriction on transfer of shares by the members of a private company. Sec 76
o a member of a private company desirous of selling any shares held by him, shall intimate to the board
of his intention through a notice.
o On receipt of such notice, the board shall, within a period of 10 days, offer those shares for sale to the
members in proportion to their existing shareholding.

o The letter of offer for sale shall be dispatched to the members through
o registered post or
o courier or
o through electronic mode.
o The letter of offer for sale shall specifying
a) the number of shares to which the member is entitled,
b) price per share and
c) specifying the time limit, within which the offer, if not accepted, be deemed as declined,

o If the whole or any part of the shares offered is declined or is not taken, the board may offer such
shares to the other members in proportion to their shareholding.
o If all the members decline to accept the offer or if any shares are left over, the shares may be sold to
any other person as determined by the member, who initiated the offer.
o The mechanism to determine the price of shares shall be such, as may be specified.
o a private company may transfer or sell its shares in accordance with its articles of association and
agreement among the shareholders, if any, entered into prior to the commencement of Companies Act
2017
o Any such agreement will be valid only if it is filed with the registrar within 90 days of the
commencement of this Act.

Transfer to successor-in-interest. Sec 78

o The shares or other securities of a deceased member shall be transferred on application duly
supported by succession certificate or by lawful award, as the case may be, in favour of the successors
to the extent of their interests and their names shall be entered in the register of members.
Transfer to nominee of a deceased member. Sec 79
o The subscriber to the memorandum shall nominate a person who in the event of death act as a
trustee and to facilitate the transfer of shares to the legal heirs of the deceased subject to
succession to be determined under the Islamic law of inheritance and in case of a non-Muslim
members, as per their respective law.
o The person to be nominated shall not be a person other than the relatives of the member, namely, a
spouse, father, mother, brother, sister and son or daughter.
o The person nominated shall, after the death of the member, be deemed as a member of company
till the shares are transferred to the legal heirs
o If the deceased was a director of the company, other than a listed company, the nominee shall also
act as director of the company to protect the interest of the legal heirs.
o The nomination shall not bias the right of the member making the nomination to transfer, dispose
of or otherwise deal in the shares owned by him during his lifetime and, shall have effect in respect
of the shares owned by the said member on the day of his death.