Free transferability of share
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Free transferability of share is one essential condition for Company form of business, subject to some restrictions under private companies. New Act, deals with substantially.
Transfer of shares means the voluntary handing over of the rights and possibly, the duties of a member from a shareholder who wishes to not be a member in the company any more to a person who wishes of becoming a member.
Company shall endorse the details of transfer on the back of Certificate of Securities i.e. Form SH-1 and deliver the same to the transferee within a period of 1 month from the date of receipt of the instrument of transfer by the company.
A Company having share capital:- The Company shall not register transfer of securities of the Company or member’s interest in the Company other than beneficial owners without a proper instrument of transfer within a period of 60 days from the date of execution.
Company shall make necessary entries in the Register of Members i.e. Form MGT-1 or in the Register of Debenture holders or other securities holder i.e. Form MGT-2, within 7 days of the Board Meeting in which transfer was approved.