Transferring Unlisted Private Company Shares as a Gift: Stamp Duty, Processing Time, and Selling Restrictions

My father is planning to gift me some unlisted private company shares. We will register a gift deed and pay a stamp duty of 0.25% per Rs.100 of net worth. After that, we will submit the gift deed, share certificate, and share transfer form to the company. I have a few questions regarding this process: Can you please confirm the stamp duty to be paid on this transaction in Maharashtra? How much time does it generally take for the transfer of shares by gift to get recorded in the Registrar of Companies (ROC)? Can I sell those shares immediately, before…

by Shivendra Pratap Singh | Mar 15, 2023 | Civil Matters

Transferring Unlisted Private Company Shares as a Gift: Stamp Duty, Processing Time, and Selling Restrictions. My father is planning to gift me some unlisted private company shares. We will register a gift deed and pay a stamp duty of 0.25% per Rs.100 of net worth. After that, we will submit the gift deed, share certificate, and share transfer form to the company. I have a few questions regarding this process: Can you please confirm the stamp duty to be paid on this transaction in Maharashtra? How much time does it generally take for the transfer of shares by gift to get recorded in the Registrar of Companies (ROC)? Can I sell those shares immediately, before the transfer of shares by gift is recorded in the ROC?

Stamp duty rates may vary depending on the state. In Maharashtra, the stamp duty for gift deeds of shares is 0.25% of the market value of the shares being gifted. However, it is advisable to confirm the current rates and any applicable exemptions or concessions with the local registrar or a legal professional.

The transfer of shares by gift may take some time to get recorded in the ROC, as it involves a process of verification and approval. The company will need to update its share register and notify the ROC of the transfer. This process may take a few weeks or even a few months, depending on the efficiency of the company and the ROC.

Technically, you can sell the gifted shares immediately after receiving them, but it is recommended that you wait until the transfer is recorded in the ROC. This is because the buyer of the shares may require proof of ownership, and the transfer may not be legally valid until it is recorded in the ROC. Additionally, if you sell the shares before the transfer is recorded, it may create complications in the future if the transfer is not completed for any reason.

Author's Profile

Tags:

Shivendra Pratap Singh

Shivendra Pratap Singh

Advocate

Advocate Shivendra, practicing law since 2005, specializes in criminal and matrimonial cases, extensive litigatin experience before the High Court, Sessions court & Family Court. He established kanoonirai.com in 2014 to provide dependable and pragmatic legal support. Over the years, he has successfully assisted thousands of clients, making the platform a trusted resource for criminal and matrimonial dispute resolution in India.

Consult Online

Related Matters

Bank refused to obey the order of Lok Adalat

Mar 9, 2025 |

This legal guidance explains the remedies available when a bank fails to comply with a compromise order passed by the Lok Adalat despite receiving the settled amount. It discusses enforcement of the award, execution proceedings, contempt-related remedies, and the legal course available against arbitrary action of the bank.

Subsequent proceedings in arbitration matter

Feb 7, 2025 |

This legal guidance explains the legal consequences and subsequent proceedings arising after an arbitration award or order in an arbitration matter. It discusses enforcement of the award, challenge proceedings under Section 34 of the Arbitration and Conciliation Act, execution remedies, limitation periods, and the jurisdiction of courts in post-award disputes.

Civil court dismissed suit for want of jurisdiction

Jan 11, 2025 |

This legal guidance explains the remedies available when a civil court dismisses a suit on the ground of lack of jurisdiction. It discusses return of plaint under the Civil Procedure Code, refiling before the competent court, limitation protection, and the legal consequences arising from adjudication by a court lacking jurisdiction.

Admission in NRI quota can be changed afterwards

Dec 25, 2024 |

This legal guidance explains whether admission obtained under the NRI quota can subsequently be altered, cancelled, or converted to another category. It discusses eligibility conditions, consequences of misrepresentation, university regulations, refund issues, and the legal remedies available against arbitrary cancellation or change of admission status.

Claim related to motor accident in consumer forum

Dec 2, 2024 |

This article discusses whether a claim arising out of a motor accident can be pursued before a Consumer Forum in addition to or instead of proceedings before the Motor Accident Claims Tribunal (MACT). It examines the maintainability of such claims under consumer protection law, the liability of insurance companies, and the distinction between deficiency in service and statutory compensation under the Motor Vehicles Act.