If Transferee is Minor
If, transferee is a minor, transfer of shares is to be effected in accordance with the provisions of the Articles of Association of the company, where shares to be transferred are fully paid-up, there is no problem for companies to register the same. In favor of minors through guardian.
- After making through scrutiny the officer in charge will put his initial on the form and the particulars of the transfer instrument will be entered in the Shares Transfer Register.
- At periodic intervals, the Share Transfer Register, along with necessary document will be put up before Board or Committee, and they shall initial the Share Transfer Register for having approved the transfer. The date of approval of the transfer will be indicated in the register.
- Where transfers are duly approved, endorsements will be made on the share certificates in favor of the transferees and will be certified by company secretary or an officer authorized by the Board in this behalf. After doing so, the share Certificates will be returned to the sender along with a covering letter. Where new certificates are to be issued, they have to be issued in conformity with the companies ( issue of share certificates) Rules, 1960
- Finally necessary entries shall be made in the Register of Members in regard to the transferor and the transferee. If the company refuses to register the transfer of shares, it shall send a notice intimating the refusal to the transferor and transferee.
- On entry of the transferee's name in "Register of Members", he becomes entitled to dividend and other bonus or share in surplus, as may be declared.
Right of Transferee on Shares Pending Registration of Transfers.
Generally entries n the "Register of Members "may take some time. However, the transferee's right to dividend, Bonus Shares, Right shares etc, stands fully protected. However, the transfer deed must have been delivered to the company before the record date or book closure; otherwise this benefit would be lost. It should be noted that the transferee can get the dividend in respect of shares under transfer, only if he secures a mandate therefore from the transferor and produces the same before the company (sect 206 A)
Where dividend has already been declared, the transferee (buyer, whose name is not registered), may lodge the shares and other relevant documents, with the company, for being registered in his name, within 15 days from the date when dividend became due.