A share transfer moves existing shares from one holder to the next. It is not an allotment, which creates new shares. It is not a transmission either, which is what happens when a shareholder dies. If you hold shares in a Bengaluru private limited company and a different name has to sit against them, this is your route. What follows is the applicability test, the records the company must produce, the date the sixty day clock runs from, and what a badly stamped instrument costs later.
Which transfers does this cover, and which ones are not transfers at all?
Three checks settle applicability before a single document is drafted.
- Your company is a private limited or an unlisted public company. An LLP has no shares at all, so a change of partners moves on a supplementary deed instead.
- The shares sit in physical certificates. Where a Bengaluru company has dematerialised, the holding moves on a depository instruction and that instrument does not have to be stamped.
- Both sides are alive and willing. A transfer is a voluntary deal between a transferor and a transferee, and anything driven by death or insolvency runs elsewhere.
Private limited companies are where the work sits, because their shares are restricted by design. The Articles decide who may hold shares, who gets first refusal, and whether the board can simply say no. Read them before you agree a price, not after. The national framework sits in share transfer in India explained. This page is the Bengaluru layer on top of it.
What has to be sitting in your records before anyone can execute the SH-4?
The instrument is the easy part. The records behind it are what delay Bengaluru transfers.
- The Articles of Association as amended, read for right of first refusal, lock in and board approval clauses.
- The register of members as it actually stands, tested against the shareholding in the last MGT-7 the company filed.
- The original share certificate, with folio and distinctive numbers matching that register.
- Identity proof for both sides, and a written note of how the consideration was arrived at.
Then the duty. Since 1 July 2020 stamp duty on a transfer of securities has been a central charge under Article 56A of Schedule I to the Indian Stamp Act 1899, not a Karnataka one. For a security that is not a debenture, the delivery basis rate is 0.015 percent. Article 62 items (a) and (b), which carried the older rate that most pages still quote, were omitted by the Finance Act 2019. Nothing charges that rate any more.
Off market, which is where a Bengaluru private company always sits, section 9B decides who pays. On a sale or a transfer the duty is the seller's, computed on the consideration written into the instrument. Karnataka law does reach one document further down the chain. Under section 30 of the Karnataka Stamp Act the duty on a share certificate falls on the company, so the replacement certificate is the company's charge and not the buyer's.
What is the deadline, and what date does the clock run from?
Sixty days, counted from the date of execution written on the instrument itself. Not from the board meeting, not from the day the money moved, and not from the day the buyer decided. A stamped and executed SH-4 has to reach the company inside that window, or the company is entitled to refuse it.
Two things follow from that counting rule. First, duty comes before the clock rather than inside it. An instrument is stamped before or at execution, so if the amount is still being worked out on the day everyone signs, the date on the form is already wrong.
Second, the certificate deadline runs off receipt and not off approval. Once the company has the instrument, a replacement certificate is due within one month of that date. The board still has to approve the transfer and the register entry still has to be made, and both belong inside that same month.
The date nobody watches is the annual return. The changed shareholding surfaces in the next MGT-7 filed for ROC Bengaluru, and where the register and the return disagree, the return is the version an investor's counsel reads first.
What does a late or badly stamped transfer actually cost?
None of this looks dramatic on the day. It becomes expensive later, and almost always inside a diligence request.
| What goes wrong | What it costs you |
|---|---|
| The SH-4 reaches the company after the sixty day window | The company can decline to register it, so the instrument is executed and stamped a second time |
| The instrument is unstamped or short stamped | It cannot be acted upon or received in evidence until the duty and a penalty have been paid |
| No board resolution was ever passed | The transfer is not effective, whatever the two parties agreed between themselves |
| The register of members was never written up | The buyer is not a member on the company's own record, so no vote, no dividend and no notice of a meeting |
| The register and the annual return disagree | The MGT-7 on ROC Bengaluru's file shows a shareholding your minutes cannot support |
A seed round is where these surface. Counsel asks for the register, the stamped SH-4 and the board minute together. Two out of three is not a clean answer.
How does the transfer run once our team takes it over?
- We read the Articles and the register, and test the shareholding against the last annual return filed for ROC Bengaluru (the MCA also writes it ROC Bangalore).
- We compute the duty under Article 56A on the consideration, tell you who bears it, and confirm the payment route before anything is dated.
- The SH-4 is drafted, signed by transferor, transferee and a witness, and lodged with the company inside the sixty day window along with the original certificate.
- We draft the board resolution, the board approves the transfer, and both the register of members and the register of transfers are written up.
- The old certificate is cancelled, a replacement is issued, and the new shareholding is carried into your next MGT-7 on the MCA V3 portal.
None of that is handed in over a counter. There is no standalone share transfer form for the registrar, and no reason to appear at Kendriya Sadana in Koramangala, where ROC Bengaluru and the Regional Director for the South-Western Region both sit. The registrar sees this transaction once a year, through your annual return.
Which Bengaluru companies land on this desk most often?
The pattern here is rarely a dramatic exit. It is the tidy up that everyone postponed.
- An aerospace components and testing venture in Yelahanka bringing a technical co founder onto the cap table properly, three years after the handshake that promised it.
- That same venture a year later, moving a retiring founder's holding into a family holding company ahead of a customer audit.
- A SaaS founder in Koramangala buying out an early angel so the register is clean before a seed round closes.
- A company that shifted its registered office from Indiranagar to Whitefield and never reconciled the register with the annual return it had already filed.
In each of those the transfer itself takes an afternoon. Reconstructing what should have happened two years earlier is the real job.
Why LegalX India for a share transfer in Bengaluru?
Our CA and CS team carries the whole file. The Articles are read before a price is agreed. The duty is computed on the article actually in force, the resolution is drafted and both registers are written up. The shareholding is then carried through to your next MCA V3 filing. Work starts at ₹4,999 and the usual run is 7 to 10 days, with stamp duty payable separately on your own consideration.
Our own Bengaluru office is in Kanak Nagar and you are welcome to sit with the team there. Nothing in a share transfer requires it. Your registrar follows your company's registered office in Karnataka, never ours, and every step above is run online.