Structured Biiz

Transfer of Securities

What is transfer of securities / interest of a member?

The ownership in the Company is held in the form of securities, in case of Companies having Share Capital or in the form of ownership interest, in case of Companies having no Share Capital.

The Members owns the ownership of the Company by way of subscribing to the Securities (in the form of Shares – Equity Shares / Preference Shares)  of the Company. In case the Company is having no Share Capital, the ownership interest of a member in the Company determines the ownership status of the member in the Company.

Instrument for transfer of security is compulsory

Section 56 provides that a Company shall not register a transfer of Securities of the Company or the interest of a member in the Company in the case of a Company having no share Capital, unless a proper Transfer Deed in prescribed format is duly stamped and executed by or on behalf of the Transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the Transferee, has been delivered to the Company, along with the Certificate relating to the Securities, or if no such Certificate is in existence, along with the letter of allotment of the Securities.

Securities held in physical form

Most of the Private Limited Companies hold their Securities in Physical form i.e., in the form of duly stamped and executed Share Certificates.

In case the Securities are held in physical form, duly executed and dated Instrument of Transfer needs to be delivered to the Company within 60 (Sixty) days from the date of such execution of Instrument of Transfer in prescribed format.

In case of partly paid share and the application is made by the Transferor, then Transfer can not be executed unless notice is given to the Transferee and the Transferee gives No Objection (NOC) within 2 weeks of the receipt of the notice.

Listed Company & Unlisted Public Company needs to dematerialise their Securities

Vide Notification dated September 10, 2018 an amendment has been made to the Companies (Prospectus and Allotment of Securities) Rules, 2014. Vide the said notification, it is mandatory for every Unlisted Publicly held Company to facilitate dematerialisation of its existing securities.

Hence, every listed Company and every unlisted Publicly held Company needs to dematerialise their securities. Companies can admit their securities with National Securities Depository Limited (NSDL) and Central Depositories Services India Limited (CDSL).

NSDL and CDSL are both Government Registered Depositories in India regulated by Securities and Exchange Board of India (SEBI). NDSL is the depository for National Stock Exchange (NSE) and CDSL is the depository for Bombay Stock Exchange (BSE). They hold securities of Companies in an electronic form. 

Securities are held by NSDL and CDSL in Demat Account. The Account gets credited when a person buys securities and is debited when a person sells securities. The Demat Account is just an intermediary, the Securities are actually held by the Depositories.

Stamp Duty on issuance & transfer of Securities

The Finance Act, 2019 has notified amendments to the Indian Stamp Act, 1899. The amendments in Indian Stamp Act, 1899 has been made effective from 1st July, 2020. Revised Stamp Rates as per amendment under the Finance Act, 2019. Click Here


Issuance of Debentures


Transfer or re-issuance of Debentures


Securities other than Debentures

Issuance of Securities


Transfer of Securities on delivery basis


Transfer of Securities on non-delivery basis



Futures (Equity and Commodity)


Options (Equity and Commodity)


Currency and interest rate derivatives


Other derivatives


Government Securities


Repo on Corporate Bonds


Transfer of Securities

All inclusive

*The fee mentioned above is not an inclusive fee. Govt. Fees, Stamp Duty Payment or late Penalty Fee or any out of pocket expenses arising in the matter shall be charged separately.