Summary: The transfer of shares through demat mode in an unlisted company requires the company to have an ISIN (International Securities Identification Number). If the ISIN is frozen, an application must be made to the Registrar and Transfer Agent (RTA) for unfreezing. Both the transferor and transferee must have active demat accounts in the same depository (NSDL or CDSL). The transferor must also have a Delivery Instruction Slip (DIS) book with an annexure if the transfer involves consideration. Key details such as per-share value and payment details must be determined in advance. The process begins with the transferor adding the transferee’s demat account on the depository’s platform, which may take 24–48 hours. Next, the transferor must complete the DIS slip and submit it to their depository participant (e.g., Sharekhan, StockHolding). Stamp duty on the consideration amount must be paid either through the depository participant or directly via NSDL/CDSL. Additionally, the depository participant’s transfer fee must be paid. Upon submission, the depository participant verifies the documents, generates a verification link, and sends it to the transferor for same-day authentication. To ensure a smooth transfer, the DIS slip must accurately mention the DP ID, Client ID, ISIN, security name, reason code, and transfer purpose. The signature on the DIS slip must match the one on record. If a corporate entity is transferring shares, the DIS slip must be signed by an authorized director with the company’s stamp. Any errors may require the process to be repeated.
Prerequisite for transfer of shares through demat mode:
1. Company having ISIN (International Securities Identification Number).
2. If the company freeze ISIN while avail ISIN for transfer of shares then company needs to make application to RTA (Registrar and transfer agent) to unfreeze ISIN otherwise if the company not freeze ISIN while avail ISIN no action need to be done.
3. Both the parties (Transferor and transferee) have valid active demat account in the same depository (NSDL or CDSL) from whom the company availed ISIN.
4. The transferor having DIS (Delivery Instruction Slip) book along with annexure in case of share transfer with consideration. correct the sentense and formatting
5. Value per share on which shares to be transferred.
6. Payment details for transfer consideration from transferee to transferor bank account.
STEPS TO FOLLOW
Step 1: Transferor need to add transferee demat account on depository website or through app before transfer shares it will take 24 hours to 48 hours to add transferee demat account.
Step 2: Transferor need to fill DIS (Delivery Instruction Slip) along with annexure to DIS book and need to submit to the Depository participants (Ex. Sharekhan, stockholding).
Step: 3 Transferor need to make stamp duty payment on consideration via the Depository participants upfront or make payment directly on the website of NSDL or CDSL.
Step:4 Transferor also need to make share transfer payment of depository participants.
Step: 5 After submission of DIS slip along with annexure the depository participants verify the same. please correct the formating and sentense
Step:6 The link will be generated by the depository participants and send to transferor registered mobile number or email id for verify the transfer of shares by transferor (The verification need to be done in same day otherwise whole process need to repeated).
Points to be consider:
1. While Fill the DIS slip mention the correct DP ID and Client ID of transferee, consideration, reason code, reason, ISIN, in security name mention the company name.
2. Reason code and reason or purpose of transfer share refer from DIS slip first page in normal case Reason code will be 1 and purpose Off-Market Sale (Transfer with consideration).
3. Transferor need to sign DIS slip along with annexure, signature need to be match with same at the time open demat account.
4. While filling the Annexure to DIS slip mention the correct DIS slip number as mentioned in DIS slip and Name of transferee as per demat account details, payment details.
5. In case of body corporate is transferor then DIS slip signed by authorised director along with company authorised signatory stamp. correct the wording
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