This blog is written by Mr. Usman Ghani, Associate Audit and Assurance Services. Please read this blog and provide your valued comments,
Procedure of transfer of the Shares in Private Limited Company in the light of Section 76 of Companies Act 2017 and Section 12B The Companies (General Provisions and Forms) Rules, 1985 is as follows:
No member of the Private Limited Company can transfer the share of the company without giving intimation to the board through the notice for the selling of the shares.
The member who is desirous of selling the shares shall intimate the Board through notice about the intentions.
If the board is satisfied with the selling price of the share, on receipt of such notice the board shall with in a period of Ten days (10) offer those shares to the members in proportion to the number of shares held by them.
If in the opinion of the Board the price of the shares is materially higher than the fair value, they shall within Seven days (7) of the date of receipt of the notice ask the seller to revise the price of such shares within Seven days (7) of receiving the notice for revising the price, otherwise it is deemed to be withdrawal of the offer.
If the seller is disagreed to revise the price, the directors shall on the cost of the company, proceed towards the determination of the fair value of the shares from a firm of Chartered Accountant not being the auditors of the company, having Quality Control Review (QCR) rating by the institute of the Chartered Accountant Pakistan, who shall send report to the company and company shall forward to the seller member.
Within Seven days (7) of receiving the valuation report the seller shall communicate to the company if is acceptable or not otherwise it is deemed to be withdrawal of the offer.
The Directors shall offer the shares to the members in proportion to the number of shall held by them, on fair value given by the firm of CA or the offered price.
The offer to the member shall be made through the notice in writing and clearly specifying the number of shares each member is entitled to and the price per share.
The period of accepting the offer and sending the letter of accepting or the decline shall be not less than Seven days (7) and not more than Fifteen days (15) of receiving the notice, notice shall be marked as “Offer for Sale of Shares”
If the offer is accepted or rejected the members shall send the letter of acceptance or decline to the company within specified within the time limited as specified above containing.
Signature and Thumb Impression
If no such letter is received by the company in response of first notice, the Company shall send the reminder allowing further time not being less than seven days (7), failing which the offer will be declined.
Note: The acceptance of the shares shall be made through banking channel including but limited to pay order or bank draft.
If the whole or the part of shares declined by the members, the directors may offer shares to the other persons as they deemed fit.
Note: the transfer of shares to the other person shall be approved in the directors meeting and reflect in the minutes of the directors’ meeting, contain such statement that the shares firstly offered to the existing members and they didn’t exercise the right to purchase the shares.
If the wholly or partially shares are declined or not paid by the members and directors also failed to transfer shares within Sixty days (60) from the date of original offer notice or revised offer notice, the seller may transfer such number of shares as may he desire.
Note: if the transfer of shares is according the Articles of Association of the company or the agreement between the shareholders of the company prior to commencement of this Act, such agreement shall be valid if filed with the registrar within Ninety days (90) of the commencement of this Act.