What does the Transmission of shares mean?

While the transfer of shares refers to the voluntary act of transferring the shares by the shareholder, transmission of shares is a process by operation of law. Transmission of shares is a process where shares are registered under the company in the name of a deceased person or insolvent person and are registered in the name of their legal heirs by the company on proof of death or insolvency, as the case may be.

Transmission of shares takes place when a registered member dies or is adjudicated insolvent or lunatic by the competent court.

DOCUMENTS REQUIRED FOR TRANSMISSION OF SHARES

In case of transmission of shares by operation of law, it is not necessary to submit the transfer deed, a simple application to the company by a legal representative along with the following documents is sufficient:-

• Certified copy of death certificate.
• Sucession Certifcate. (A succession certificate is a legal document issued by a civil court to the legal heirs of a deceased person to establish the identity of the heirs, their legal status as successors, and their respective shares in the estate.)
• Probate (Probate is the legal process of administering the estate of a deceased person, including validating their will, paying their debts and taxes, and distributing their assets to their beneficiaries.)
• Specimen signature of the process.

WHETHER TRANSMISSION OF SHARES WILL SUBJECT TO ANY LIABILITY?

Yes, in case of transmission of shares, shares continue to be subject to the original liabilities and if there were a lien on shares on any sum due, such lien would subsist.

MODES OF TRANSMISSION OF SHARES

• The survivor, in case of joint shareholding, can get the shares transmitted on the production of the death certificate of deceased shareholders.
• If the member of the Company dies and leaves after him a will or letter of administration, then the survivor shall get a copy of the will certified under the seal of the court. The certified copy of the will is called a probate and it shall be forwarded to the company.
• If a member of the company dies without leaving the will, then a succession certificate issued by the Court shall be issued to the Company.