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Stock Gift Agreement

Stock Gift Agreement Template for India

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Key Requirements PROMPT example:

Stock Gift Agreement

"I need a Stock Gift Agreement to transfer 10,000 shares of my family-owned private limited company to my three children equally, to be completed by March 2025, with specific conditions about board positions and voting rights."

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Document background
The Stock Gift Agreement is a crucial document used in Indian corporate practice for transferring shares without consideration, commonly utilized in family wealth planning, corporate restructuring, or charitable giving. This agreement needs to comply with various Indian regulations, including the Companies Act 2013, SEBI guidelines (for listed companies), and tax laws. It's particularly important in scenarios involving family business succession, employee rewards, or philanthropic activities. The document must address specific Indian legal requirements such as stamp duty compliance, tax implications under the Income Tax Act, and proper documentation for regulatory authorities. The agreement typically includes detailed information about the shares being transferred, representations about their unencumbered status, and the process for completing the transfer in accordance with Indian corporate law.
Suggested Sections

1. Parties: Identification of the donor and recipient, including their full legal names, addresses, and tax identification numbers

2. Background: Context of the gift, relationship between parties, and brief description of the purpose of the agreement

3. Definitions: Definitions of key terms used in the agreement, including 'Shares', 'Company', 'Transfer Date', etc.

4. Details of Gift: Specific description of the shares being gifted, including number, class, and the company details

5. Declaration of Gift: Clear statement that the transfer is voluntary, without consideration, and intended as a gift

6. Transfer Process: Steps to be taken to effect the transfer, including documentation and regulatory requirements

7. Representations and Warranties: Donor's declarations regarding ownership, right to transfer, and absence of encumbrances

8. Tax Obligations: Acknowledgment of tax implications and responsibilities of each party

9. Governing Law: Specification that the agreement is governed by Indian law

10. Execution: Signature blocks and execution formalities

Optional Sections

1. Board Approval: Required if the company's articles mandate board approval for share transfers

2. Regulatory Compliance: Needed if the shares are of a listed company or if SEBI regulations apply

3. FEMA Compliance: Required if either party is a non-resident Indian or foreign national

4. Nominee Details: Optional section for recipient to designate a nominee for the shares

5. Right of Revocation: Optional clause specifying any conditions under which the gift may be revoked

6. Power of Attorney: Optional authorization for completing transfer formalities

7. Dispute Resolution: Optional detailed dispute resolution mechanism beyond basic governing law clause

Suggested Schedules

1. Schedule 1 - Share Details: Detailed description of shares including share certificate numbers, distinctive numbers, and folio numbers

2. Schedule 2 - Company Information: Details of the company whose shares are being transferred, including registration number and registered office

3. Schedule 3 - Transfer Forms: Share transfer forms as required by the Companies Act

4. Appendix A - Board Resolution: Copy of board resolution approving the transfer (if required)

5. Appendix B - Valuation Report: Share valuation report for tax purposes

6. Appendix C - KYC Documents: Copies of identity and address proofs of both parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Financial Services

Family Business

Private Equity

Corporate Services

Legal Services

Investment Management

Wealth Management

Professional Services

Banking

Corporate Advisory

Relevant Teams

Legal

Corporate Secretarial

Compliance

Finance

Tax

Wealth Management

Corporate Governance

Share Registry

Board Secretariat

Relevant Roles

Company Secretary

Legal Counsel

Corporate Lawyer

Tax Advisor

Wealth Manager

Estate Planner

Compliance Officer

Managing Director

Board Director

Chief Financial Officer

Corporate Governance Officer

Share Transfer Agent

Investment Advisor

Industries
Securities and Exchange Board of India Act, 1992: Governs the securities market in India and regulates share transfers, especially for listed companies
Companies Act, 2013: Regulates the transfer of shares, maintenance of share registers, and procedural requirements for share transfers
Income Tax Act, 1961: Addresses tax implications of gifting shares, particularly Section 56(2)(x) which deals with taxation of gifts
Indian Stamp Act, 1899: Determines the stamp duty payable on share transfer documents
Transfer of Property Act, 1882: Provides legal framework for transfer of property including gifts, defining requirements for valid gifts
Indian Contract Act, 1872: Establishes basic principles of contract formation and validity, relevant for the agreement structure
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: May be relevant if the gift involves substantial shareholding in a listed company
Foreign Exchange Management Act, 1999: Applicable if either the donor or recipient is a non-resident Indian or foreign national
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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