Form SH-4 is the instrument of transfer used to move shares held in physical form in a private company from one holder to another. The transferor and transferee execute it, get it stamped, and deliver it to the company within 60 days of execution (section 56(1)) — the company then either registers the transfer and issues new share certificates within 1 month, or sends a reasoned refusal within 30 days. Stamp duty is 0.015% of the consideration, the same rate for physical and demat transfers, since 1 July 2020.
A cluster of 2026-dated blog posts claim SH-4 is now an e-form filed on MCA V3 — it is not, and no bare reading of section 56 or Rule 11 supports that claim. SH-4 is a private instrument delivered straight to the company; there is no SRN and no ROC filing fee for the transfer itself. CapEasy handles share transfers and cap table changes for founders who want the SH-4, stamping and board paperwork done correctly the first time.
1 December 2025: the small-company definition widened to paid-up capital up to ₹10 crore and turnover up to ₹100 crore (G.S.R. 880(E)). More private companies now count as small, which keeps them outside the Rule 9B demat mandate — they can carry on using physical SH-4 transfers rather than routing through a depository.
Who needs Form SH-4
- Any transferor and transferee moving shares held in physical form in a private company (also unlisted public companies), under section 56 of the Companies Act, 2013 and Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014.
- Sale and gift transfers alike — SH-4 is required even at nil or nominal consideration, because it is a transfer, not a transmission.
- Not transmission: shares passing by death, succession or inheritance move without SH-4 or stamp duty, on production of a death certificate, succession certificate or probate to the company.
- Non-small private companies (paid-up capital above ₹10 crore or turnover above ₹100 crore) fall under the Rule 9B demat mandate — new transfers there route through the depository system rather than physical SH-4.
What Form SH-4 costs: stamp duty
Stamp duty on a share transfer changed nationwide on 1 July 2020:
| Period | Rate | Basis |
|---|---|---|
| Before 1 July 2020 | Up to 0.25% | State-administered, varied by state |
| From 1 July 2020 (current) | 0.015% | Uniform nationwide — same rate for physical (SH-4) and demat transfer |
Several ranking pages still print 0.25% for physical transfers and 0.015% only for demat — that split describes the pre-2020 rule. Any transfer executed today, physical or demat, is stamped at 0.015% of consideration. Paying it is customary on the transferee, though the SH-4 or sale agreement should say so expressly.
Timelines: delivery, certificates and refusal
- Delivery to the company: within 60 days of the date SH-4 is executed (section 56(1)). If the share certificate is lost or there is a genuine dispute over title, the company can still register the transfer later on an indemnity basis.
- Certificate issuance: if the board approves, the company must issue new share certificates and update the Register of Members within 1 month of receiving SH-4 (section 56(4)(c)).
- Refusal notice: if the board refuses — usually on an Articles of Association pre-emption or right-of-first-refusal ground — it must send a reasoned refusal notice within 30 days of receiving SH-4 (section 58(4)).
- Appeal: the transferor or transferee can appeal a private company’s refusal to the NCLT within 30 days of the refusal notice.
How share transfer actually works (it is not an MCA V3 filing)
SH-4 is not filed with the Registrar of Companies. There is no SRN, no upload to MCA V3, and no ROC fee for the transfer itself. The transfer happens entirely between the transferor, the transferee and the company:
- Check the Articles of Association for pre-emption or transfer-restriction clauses, and offer the shares to existing members first if the AOA requires it.
- Transferor and transferee execute Form SH-4, filling in consideration, share class, distinctive numbers and folio, dated and signed by both parties.
- Pay stamp duty at 0.015% of consideration through e-stamping or franking as per the state’s process.
- Deliver the stamped SH-4 with the original share certificate to the company within 60 days of execution.
- The board meets to verify execution and stamping, check AOA compliance, and pass a resolution approving or refusing the transfer.
- If approved, update the Register of Members and issue new share certificates within 1 month of receiving SH-4.
- If refused, send a written refusal notice with reasons within 30 days, and inform the party of the 30-day NCLT appeal window.
Penalty for non-compliance
Contravening any part of section 56(1)–(5) — a missing instrument, blown timelines, an unstamped SH-4 acted upon — carries a flat ₹50,000 penalty on the company and on every officer in default, under section 56(6) after the 2020 decriminalisation. Older pages still quote the pre-2020 range of up to ₹5,00,000 for the company; that range was replaced in December 2020. Separately, an unstamped or under-stamped SH-4 is a defect under the Indian Stamp Act — it is inadmissible as evidence, and the company should not act on it until duty is paid.
Verified against the Companies Act, 2013 / LLP Act, 2008, MCA rules and circulars as of 31 July 2026. Your exact position depends on your entity and any circulars MCA issues — we confirm it for you, and always recommend checking the official MCA portal. CapEasy is a private consultancy and is not affiliated with any government authority. This page is a guide, not legal advice.