lawfully register a transfer

1. Transfer to be in the prescribed form. Shares may be transferred by executing an installment of transfer (called ‘transfer deed)’ duly stamped and signed

by the transferor and transferee. The instrument must specify

the name, address and occupation of the transferee. The instrument of

transfer Hurst be in the prescribed Form. Before it is signed by or on behalf of the transferor and before any entry is made therein, it shall be presented to

the prescribed authority for stamping or endorsement of the date on which it is presented. Without such stamping or endorsement the Fonn cannot be

lodged with the company.

2. Execution of trimester deed. After stamping or endorsement of the date of presentation on the Form and its execution by the transferor and transferee,

every such Form must be delivered to the company’s head office along with the share certificate aI:1d where share certificate has not been issued, along

with the letter of allotment-.

the date of registration of transfer. From this date, the transferor loses all his future rights as to receive dividend, voting, and all future liabilities including

the liability to pay future calls.

No Need of Excluding Transfer Deed [Sec. 108 (3»). Where both transferor and transferee avail the services of delJOsitory. the procedural requirements

associated with the transfer of securities shall not apply to such transfer, since there is no need of executing a transfer deed.

Explain the legal position of transferor and terms free pending registration of transfer by the company.

When a shareholder transfer his shares to another person, the transferor or transferee may send the share certificates along with transfer deed duly filled

in, to the company for registration. The transfer takes effect as soon as it is registered with the company in the name of transferee. The name of the

transferor is struck off from the register of members and the name of transferee is entered in the register of members. During tendency of registration,

the rights and liabilities of transferor and transferee are as follows

When a member transfers his shares, he transfers all his rights and obligation as a shareholder as from tlui date of transfer. The transferor does not

transfer the rights as to dividend and bonuses already declared, nor does he transfer my liability for calls already ade and remain unpaid. However, he

transfers all his rights and obligations as to future dividend and bonuses and also the liability for calls not yet made. The legal effect of transfer is from the

date the transfer is registered. and the transferee’s name is put in the books of the company as the owner of the shares. Therefore, till the transfer of

shares is duly registered with the company, the transferor remains the owner of such shares and is entitled for dividend and bonuses declared before

registration of transfer and is also liable for unpaid class, if any.

So far as tile transferor and transferee inter-se, are concerned, tile transfer takes effect immediately on tile execution of proper transfer deed. During

tendency of registration, the equities exists between them but not between the transferee and the company. Thus, the effect of transfer of shares, before

its registration, as regards the rights and liabilities of tile transferor and the transferee, the transferor against future calls paid by him against his shares

from the date of transfer. (Spencer vs. Ashworth Parting & Co.) and the transferor; on the other hand he must hand over the dividend, bonus or other

amounts received from the company on such transferred shares after the transfer of shares to the transferee. The parties may agree on any terms

contrary to the above provisions.

As regards position of transferor, the provisions of Sec. 27 of the Securities (Contracts and Regulation) Act 1956, lays down that it shall be

lawful for tube person whose name appears in the Register of Members as tbe holder of shares, to receive and retain any dividend declared by the

company even after the transfer of shares to the transferee for consideration. But, if the transferee has lodged the shares and all other documents relating

to transferor to the company within 15 days from the date on which dividend became due, the transferee can claim such’ dividend declared by’ the

company.