Chapter IV - Share Capital and Debentures
Section 44
Section 44: shares and debentures as movable property
A member’s shares, debentures or other interest in a company are movable property, transferable in the manner provided by the company’s articles.
On this page
Need advice on Section 44?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
The shares or debentures or other interest of any member in a company shall be movable property transferable in the manner provided by the articles of the company.
Introduction
Section 44 does two things. It characterises a member’s shares, debentures or other interest as movable property, and it points to the company’s articles for the manner of transfer.
The articles operate alongside the Act’s own transfer rules, including section 56 on transfer instruments and section 58 on refusal of registration.
Key takeaways
Movable property
Shares, debentures and other member interests are movable property.
Articles govern the manner
Transfer is in the manner provided by the articles of the company.
Read with other sections
Section 56 procedure and the private-company transfer restriction in section 2(68) also apply.
Identify the property interest
Section 44 applies to shares, debentures or any other interest of a member in a company. Each is movable property for the purpose of the section.
Follow the articles
The manner of transfer comes from the company’s articles. For a private company, the definition in section 2(68) requires its articles to restrict the right to transfer its shares, so check those restrictions before agreeing a transfer.
Complete the statutory procedure
A transfer in the manner provided by the articles must still meet the Act’s requirements, such as the instrument of transfer and delivery period in section 56(1). Where a private company refuses registration, section 58 governs the notice and appeal route.
Practical preparation
Identify the security or interest; read the transfer clauses in the articles; check any private-company restrictions; prepare the section 56 documents; track the company’s response under section 58.
Commencement and amendment record
Section 44 came into force on 12 September 2013 under S.O. 2754(E) dated 12 September 2013. India Code’s consolidated text shows no amendment to this section, and the Companies (Amendment) Acts of 2015, 2017, 2019 and 2020 contain no amending instruction for it.
Practical checklist
Do
- Read the articles before agreeing transfer terms.
- Treat section 44 as the starting point and section 56 as the procedure.
Avoid
- Do not assume a private company’s shares are freely transferable.
- Do not skip the statutory instrument of transfer because the articles are silent.
Illustrative example
Hypothetical: transfer in a private company
A shareholder of a private company agrees to sell shares to an outsider.
Articles
Check the transfer restrictions the articles contain under section 2(68).
Procedure
Prepare and deliver the instrument of transfer under section 56(1).
Response
If the company refuses, section 58 requires a reasoned notice within thirty days.
Outcome
- The shares are movable property, but the transfer must follow the articles and the statutory procedure.
Glossary
- Movable property
- The legal character section 44 gives to a member’s shares, debentures or other interest in a company.
- Articles
- The company’s articles of association, which set the manner of transfer under section 44.
Frequently asked questions
Are shares immovable property if the company owns land?
No. Section 44 makes the member’s shares, debentures or other interest movable property, whatever the company’s own assets.
Who decides how shares are transferred?
The manner is provided by the company’s articles, read with the Act’s transfer provisions such as section 56.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026