MCA Clarification | Transfer of Member Interest in Companies Without Share Capital — Form SH-4 Date: 8th May 2026

 The Ministry of Corporate Affairs (MCA) has, from time to time, issued clarifications to ensure uniform application of the provisions of the Companies Act, 2013. One such clarification pertains to the transfer of a member's interest in companies that do not have share capital , a matter that is often overlooked in day-to-day corporate practice.

This article seeks to examine the statutory framework governing such transfers, the prescribed form, 

Statutory Framework

Section 56 of the Companies Act, 2013 mandates the execution of a proper instrument of transfer in respect of the transfer of securities or interest of a member. The provision applies not only to companies having share capital but also extends to companies not having share capital, such as companies limited by guarantee.

The essential requirements under Section 56 are as follows:

1. A proper instrument of transfer must be duly executed by or on behalf of both the transferor and the transferee.
2. The executed instrument must be delivered to the company within the prescribed time.
3. The transfer must be recorded in accordance with the applicable statutory provisions.

Prescribed Format — Form SH-4

Rule 11 of the Companies (Share Capital and Debentures) Rules, 2014 prescribes Form SH-4 as the Securities Transfer Form for transfer of securities held in physical form.

Rule 11(2) of the said Rules further clarifies that the same form — Form SH-4 — is also applicable in cases involving the transfer of interest of a member in a company not having share capital. The Rule specifically provides that the reference to "securities" in Form SH-4 shall be read as a reference to the "interest of the member of the company."

Accordingly, stakeholders and practitioners are advised to use Form SH-4 for the transfer of member interest in companies limited by guarantee, in strict compliance with Rule 11(2).