Free transferability of share is one essential condition for Company form of business, subject to some restrictions under private companies. New Act, deals with substantially.
Statutory provisions related to transfer of share one should refer the following sources:
Provisions given in model articles of association given in Table ‘F’ of Schedule-I Generally, a Private Company is guided by its Article of Association. As per Section 2(68) of Companies Act, 2013 Private Company restricts the transfer of shares and prohibit invitation to public to subscribe to any securities of the Company.
Transfer of shares happens for various reasons
Exit of Promoter/member
Introduction of new member
Restructuring of holding in case of closely held company