by Ferdous Ara Tuly

According to Section 2(1)(v) of the Companies 1994, “Share” means a share in the capital of the company, and includes stock except when a distinction between stock and shares is expressed or implied.

One of the elements of a company is that its debentures or shares are moveable property and these are transferable, following the method provided in the Articles of Association (AOA) of the company. For both public and private limited companies in Bangladesh, the share transfer process can be a consistent or uninterrupted process though the right to transfer of shares can be restricted in a private limited company.  This transfer will be monitored by the Registrar of Joint Stock Companies and Firms (RJSC) and Section 38 of the Companies Act 1994 will be followed in this regard.

If a person does not want to carry on as a shareholder of the company and who wants to leave his/her shares, may transfer to someone else following the steps given below:

Moreover, if the transferor and the transferee both are local or foreign nationals then they do not have to provide any proof of payment. If the transferor is a Bangladeshi and the transferee is a foreign national, the Joint Stock Companies and Firms Registrar (RJSC) may require a letter of bank encashment for the transfer of the share. Also, there are certain compliance issues mandated by Bangladesh bank in relation to the transfer of shares between foreign nationals & local nationals.

Stamp duty is payable on the face value of each share and after signing Form 117, a copy of the document should be sent to the Company for the record.

Required Documents for Share Transfer Of the Company:

(i)        A letter containing that the Board of Directors of the Company approved the  share transfer;

(ii)       A document containing a number of shares to be transferred of the Company;

(iii)      Form 117( singed);

(iv)      Board Resolution by the company approving the transfer of the shares; and

(v)       Share Transfer Certificate.

Note: More documents might be needed depending on the situation.

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