The procedure of buying shares from one director to another is covered under section 56 of the Companies Act, 2013. It provides the provisions for transfer of shares from one director to another director.
A proper document of transfer of shares (share transfer form) is to be filed as prescribed in the Form No. SH 4.
The SH 4 form for transfer needs to be duly stamped, with adequate value, dated and executed by or on behalf of the transferor and the transferee.
The board is then required to approve the transfer in order to register the same in the members register.
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