Transmission Of Shares
Transmission of shares at times is highly clumsy and runs into many legal complications
What We Do
TRANSMISSION OF SHARES
Share transmission refers to the transfer of ownership of shares from one person to another due to legal circumstances such as death, inheritance, insolvency, bankruptcy, marriage, or other lawful situations, rather than through a voluntary transfer.
Once the transmission process is completed and registered by the company, the claimant becomes the legal shareholder and is entitled to all the rights and benefits associated with the shares
Common Issues in Transmission of Shares
Holding Shares in Multiple Companies
If the deceased shareholder held shares in several companies, the required documents along with the original share certificates must be submitted separately to each company to complete the transmission process. This often requires continuous coordination and follow-up with multiple companies.
Confusion Between Transfer and Transmission of Shares
A common challenge is misunderstanding the difference between transfer of shares and transmission of shares. As per the Companies Act, these two concepts are distinct.
- Transfer of shares is a voluntary act carried out by the shareholder to transfer ownership to another person.
- Transmission of shares occurs by operation of law, usually due to events such as death, inheritance, or insolvency. In such cases, ownership is transferred based on legal entitlement, such as a will or succession rights.
Jointly Held Securities
Complications may also arise when the deceased was one of the joint holders of the shares. In such situations, the surviving holder(s) must have a valid Demat account and follow the prescribed procedures to apply for the transmission of shares.
