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Question
Justify the following statement.
A member of a Public company can transfer shares.
Solution
Justification:
- Transfer of shares means the transfer of ownership of shares from one person to another. In other words, a shareholder can transfer the share to another shareholder.
- Transfer of shares takes place when the shareholder wants to sell his shares or give as a gift to another person.
- Shares can only be transferred by following the procedure laid down in the Articles of Association. A shareholder can sell either a part of a share or entire shares held by him.
- In the case of public companies, shares are freely transferable subject to the provisions of the Articles of Association. Whereas, in the case of Private Company, there are restrictions on the free transfer of shares. Thus, it is rightly justified that, a member of a Public company can transfer shares.
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