A businessman should be ready to face any kind of situation in their career. He/She should be occupied with knowledge on every aspect of business which includes legal moves too. The share transfer is one such legal move any businessman will have to make. In both cases of selling and buying shares. The individual must be knowledgeable enough to complete the process without hassle and use it in future. The four steps are explained by corporate lawyers listed on ThreeBestRated®, an esteemed business-listing website to showcase the best at your feet. Here is the list,
Agreement
It is obvious that the seller and buyer should agree to the sale and purchase of the shares respectively. As per law, It is never a compulsion to have an agreement of written form for the purpose. However, having a written purchase & sale agreement to avoid confusion. This is usually referred to as a share purchase agreement (SPA). This drawn-out form can help you have a strong legal record.
Transfer Form
A transfer form is a detailed report including every detail of the seller and buyer along with the accurate details of shares from numbers, and types to their values. According to this form, The initiator must pay stamp duty according to the jurisdictions of transfer to the concerned authority. It can be presented to the registration of the company only after the approval of the transfer form from the authorities.
Approval
This is the most crucial step in the whole process as your transfer may or may not be approved by the directors on the board. The stock transfer form of a company for registration will be seriously evaluated and the decision will be taken according to the results. The registration process will be immediately commenced after the approval. If rejected, Proper reasons for the decline will be provided to correct it the next time.
Share Certificate
The share certificate will be the legal proof of owning the shares from the transferee. It will be issued by the company probably within two months from the time of transfer. Since electrical transfer is in practice today, You can expect an electric certificate within a week or two. Hand-to-hand, The company should also upgrade the share register with the new owner’s details and update the list of shareowners. This remains a subsequent confirmation.
All these are just a brief of the legal steps involved in the process. Being educated about this will help you have strong clarity in your moves. This will help you in arriving at a smooth share transfer that does not affect people at both ends. However, Having a professional by your side will always give you extra confidence that you are making no mistakes. They are the ones who have experience and expertise in the concern.