Definition:

Section 2 (1) (v) “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.

A person’s shares may be transferred to another person if they are no longer interested in being a shareholder of the firm. The Registrar of Joint Stock Companies and Firms (RJSC) will be kept updated on this transfer, and Section 38 of the Companies Act of 1994 shall be followed in this respect.  

Section 38 of the Companies Act, 1994

The transferor is responsible for registering company shares

  1. An application for the registration of the transfer of shares in a company may be made either by the transferor or the transferee, provided where such application is made by the transferer no registration shall in case of party paid shares be effected unless the company gives motive of the application to the transferee and subject to the provisions of sub-section (7) the company shall unless an objection is made by the transferee two weeks from the date of receipt of the notice, enter in its register of members the name of the transferee in the same manner and subject to the same conditions as if the application for registration was made by the transferee.

The company must register shares or debentures with proper instruments for indemnity.

Provided that, where it is proved to the satisfaction of the directors of the company that an instrument of transfer signed by the transferor and transferee has been lost, the company may, if the directors think fit, on an application in writing made by the transferee and bearing the stamp required by an instrument of transferor register the transfer on such terms as to indemnity as the directors may think fit.

Transferor Notice of the refusal

Nothing in sub-section (3) shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.

Nothing in this section shall prejudice any power of the company under its articles to refuse to register the transfer of any shares.

                                        The Companies (Second Amendment) Act, 2020

Amended Provision of Section 38: Earlier, it was not stated in the Companies Act, 1994, that RJSC personal appearance is required to make the transfer of shares effective. With the amendment to the Companies (Second Amendment) Act, 2020,persons who will transfer shares in Bangladesh must appear in person and certify the validity of the share at the RJSC.

The concerned share transferee shall appear in person and certify the validity of the share transfer by re-signing after submitting the list of directors concerned, annual capital statement, share transfer document, and affidavit in support of share transfer to the office of the registrar.

If the transferor of shares is a foreign national or resides abroad, the share transfer documentation and affidavit in support of the share transfer must be certified by the authorized officer of the Bangladesh Embassy/High Commission. Additionally, the Ministry of Foreign Affairs is required to counter-verify all documents. 

if the transferee of the shares fails to appear at the office of the Registrar for a justified cause, the Registrar must provide a commission subject to the prescribed fee.

Commission fees for share transfer registration

Recently, the RJSC imposed commission fees for share transfer registration. The fees will vary from Tk10,000 to Tk25,000 depending on the jurisdiction.

Key documents required for the Company’s Share Transfer

  1. Copy of the share transfer register.
  2. A document indicating the Number of shares to be transferred of the Company.
  3. A completed (signed) Company Form 117 along with the relevant share certificate and affidavit.
  4. Board Resolution by the company approving the transfer of the shares; and appointment of new directors/ resignation of directors, if any.
  5. Certificate of Transfer of Shares.
  6. Encashment certificate if the Transferor is Bangladeshi and Transferee is a foreign national or foreign company.
  7. In case any capital gain arises, the Company’s board shall be responsible to ensure that capital gain taxes are duly paid.  

In case of any query, please feel free to contact info@juralacuity.com or call +8801707108000

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