What is share transfer? Explain the method of transfer of shares. What is the difference between transfer and handover of shares?
When the owner of the company’s shares voluntarily transfers his ownership to another person, it is called transfer of shares. In other words, the transfer of ownership of shares is called transfer of shares. This is an important feature of fractions. According to Section 44 of the Companies Act, “Share is a movable property which is transferable in accordance with the law provided in the Articles of Association of the company.”
According to Judge Norman MacLeod, “A share is a strange kind of movable property which cannot be transferred from one person to another like a knot of yarn. A share is a property which is deemed to be owned by a person whose name is mentioned in the register of members and which is transferable only in accordance with the law laid down in the Articles of Association of the Company.”
The effect of transfer of shares is that the person making the transfer ceases to be a member of the company and the person in whose name the share has been transferred becomes the owner of the share and becomes a member of the company. It is necessary to note here that if the shares are forcibly sold or auctioned by the court or if they have been forfeited and resold by the company, then that share or shares will not be called transfer.