Understanding Transmission of Shares: A Complete Guide

What is Transmission of Shares?

Transmission of shares refers to the transfer of ownership of shares due to specific events such as the death, insolvency, or lunacy of a shareholder. Unlike share transfer, which is a voluntary process, transmission occurs by operation of law. The legal heirs, nominees, or administrators of the deceased shareholder are entitled to claim the shares after following the necessary procedures.

Key Differences Between Transfer and Transmission of Shares

1. Initiation:

• Transfer of shares is initiated by the shareholder.
• Transmission of shares happens automatically due to unforeseen events like death or insolvency.

1. Consideration:

• Share transfer involves monetary consideration.
• Transmission of shares is done without consideration and is based on legal succession.

1. Process:

• A transfer requires the execution of a transfer deed.
• Transmission requires submission of legal documents like a death certificate or succession certificate.

Legal Process for Transmission of Shares

To claim the transmission of shares, the legal heirs or nominees must follow these steps:

Step 1: Intimation to the Company

The legal heir or nominee should inform the company about the shareholder’s death or incapacity by submitting a formal request.

Step 2: Submission of Required Documents

The following documents are generally required:

• Death certificate of the shareholder
• Succession certificate or probate of will
• Identity and address proof of the claimant
• Original share certificates (if applicable)

Step 3: Verification by the Company

The company verifies the documents and checks if all formalities are fulfilled. If required, the company may seek additional clarifications.

Step 4: Approval and Registration

Once verified, the company registers the new shareholder’s name in its records and issues a confirmation letter. The shares are then transmitted to the rightful claimant.

Role of Share Claimers in Transmission of Shares

Navigating the transmission process can be complex due to legal requirements. Share Claimers simplifies the process by assisting claimants with:

• Documentation and compliance
• Legal guidance for obtaining succession certificates
• Liaising with companies for smooth transmission

Conclusion

The transmission of shares is an essential process that ensures the rightful successor gains ownership of a deceased or incapacitated shareholder’s holdings. With the right documentation and guidance from experts like Share Claimers, the process becomes seamless and hassle-free.