Specimen Deed of Assignment of Shares in a Company — Format 2026

Specimen Deed of Assignment explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

What Is Assignment/Transfer of Shares?

Assignment (or transfer) of shares is the process by which a shareholder (the transferor) transfers their shares in a company to another person (the transferee). Under Section 44 of the Companies Act, 2013: "shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles of the company." For listed company shares in demat form: transfer is electronic (through the depository system). For unlisted company shares in physical form: transfer requires a transfer deed (Form SH-4) along with the share certificate. The Deed of Assignment is the formal legal document evidencing the transfer of ownership.

Transfer Procedure Under Companies Act

For Physical Shares (Unlisted Companies):

(a) Step 1 — Execute Transfer Deed: The transferor and transferee execute a share transfer deed in Form SH-4 prescribed under Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014. The deed must be properly stamped (stamp duty: 0.015% of consideration or market value). (b) Step 2 — Submit to Company: Submit the transfer deed along with the share certificate to the company within 60 days of execution. (c) Step 3 — Board Approval: The Board of Directors considers the transfer request and approves or refuses (for private companies: the AOA may contain transfer restrictions — right of first refusal, Board approval requirement). (d) Step 4 — Registration: If approved: the company registers the transfer in the Register of Members and issues a new share certificate in the transferee's name within 1 month (Section 56(4)). (e) Step 5 — File Form SH-4: The company maintains the stamped transfer deed as part of its records.

For Demat Shares (Listed Companies):

Transfer is entirely electronic: (a) the transferor instructs their Depository Participant (DP) to debit shares from their demat account, (b) the shares are credited to the transferee's demat account, (c) no physical share certificate or transfer deed is needed, (d) stamp duty is collected electronically by the depository (0.015% of consideration). For listed companies: SEBI has mandated that ALL transfers must be in demat form (effective April 1, 2019) — physical share transfers are no longer permitted for listed companies.

Specimen Deed of Assignment of Shares

DEED OF ASSIGNMENT OF SHARES

This Deed of Assignment is made on at

BETWEEN:

Mr./Ms. , , PAN: (hereinafter called the "Transferor/Assignor")

AND

Mr./Ms. , , PAN: (hereinafter called the "Transferee/Assignee")

RECITALS

(a) The Transferor is the registered holder of equity shares of Rs. each (bearing Distinctive Nos. to , Certificate No. ) in (CIN: ).

(b) The Transferor has agreed to sell, transfer, and assign the said shares to the Transferee for a consideration of Rs. .

NOW THIS DEED WITNESSETH:

1. In consideration of Rs. paid by the Transferee to the Transferor (receipt of which is hereby acknowledged), the Transferor hereby assigns, transfers, and conveys unto the Transferee ALL the equity shares of Rs. each in , together with all rights, benefits, and privileges attached thereto.

2. The Transferor hereby covenants that: (a) the shares are fully paid-up, (b) the shares are free from all liens, charges, and encumbrances, (c) the Transferor has the right to transfer, (d) the Transferor shall execute all documents necessary to perfect the Transferee's title.

3. The Transferee hereby accepts the transfer and agrees to be bound by the Memorandum and Articles of Association of .

4. Both parties shall jointly apply to for registration of this transfer in the Register of Members.

IN WITNESS WHEREOF the parties have executed this Deed on .

TRANSFEROR: | TRANSFEREE:

WITNESSES: 1. | 2.

Form SH-4 — Share Transfer Deed

Form SH-4 is the PRESCRIBED form for share transfer under Rule 11. It is a concise form containing: (a) name of the company, (b) details of the transferor and transferee, (c) number and description of shares, (d) consideration, (e) signatures of both parties, (f) witness signatures. The Form SH-4 must be STAMPED — stamp duty: 0.015% of the consideration or market value (whichever is higher) — under the Indian Stamp Act, 1899 (as amended by Finance Act, 2019). The company retains the stamped SH-4 with the share certificate for its records.

Private Company Restrictions

Under Section 2(68) of the Companies Act: private companies must restrict the right to transfer shares (this is part of the definition of a private company). Common restrictions in the AOA include: (a) Board Approval: No transfer without prior Board approval — the Board may refuse transfer for any reason (subject to the AOA provisions). (b) Right of First Refusal (ROFR): Before transferring to an outsider: the transferor must first offer the shares to existing shareholders at the proposed price. (c) Lock-in Period: Shares cannot be transferred for a specified period (common in shareholder agreements). (d) Pre-emption Rights: Existing shareholders have the right to purchase shares proportionally before any external transfer. If a transfer is made in violation of AOA restrictions: the company can refuse to register the transfer.

FEMA Compliance for Share Transfers

For transfers involving non-residents (NRIs, foreign companies): (a) Resident to Non-Resident: Pricing at or above fair market value (DCF method for unlisted companies) as per FEMA Non-Debt Instrument Rules, 2019. File FC-TRS (Foreign Currency Transfer of Shares) on the FIRMS portal within 60 days. FDI sectoral caps must be maintained. (b) Non-Resident to Resident: Pricing at or below fair market value. File FC-TRS. (c) Non-Resident to Non-Resident: Subject to FEMA regulations — pricing as per guidelines. (d) Reporting: Both buyer and seller must file Form FC-TRS through authorized dealer banks. Non-compliance attracts penalties under FEMA Section 13.

Stamp Duty on Share Transfers

After the Finance Act, 2019 (effective July 1, 2020): stamp duty on share transfer is UNIFORM across India: (a) Transfer of shares (physical): 0.015% (15 paise per Rs. 100) of consideration or market value, (b) Transfer of debentures: 0.015%, (c) Transfer through demat (electronic): stamp duty collected by the depository automatically. The uniform rate replaced the earlier state-wise variation — simplifying compliance. Payment: through e-stamp or franking for physical transfers; automatically collected for demat transfers.

Income Tax on Share Transfer

(a) Listed shares: LTCG (held >12 months) taxed at 12.5% (above Rs. 1.25 lakh exemption — Budget 2024 changes). STCG (held ≤12 months) taxed at 20%. STT must be paid at the time of sale. (b) Unlisted shares: LTCG (held >24 months) taxed at 12.5% with indexation benefit. STCG (held ≤24 months) taxed at slab rates. (c) Section 56(2)(x): If shares are received as gift or at below fair market value: the difference is taxable as income in the buyer's hands (above Rs. 50,000 threshold). (d) Section 50CA: If consideration is less than fair market value: FMV is deemed as consideration for capital gains calculation.

Getting Specimen Deed of Assignment right the first time saves both time and money. Many businesses seek expert help for Specimen Deed of Assignment to stay fully compliant. The rules around Specimen Deed of Assignment are updated from time to time, so stay informed. Proper documentation makes the Specimen Deed of Assignment process smooth and hassle-free.