Transmission of shares takes place, when the registered shareholder dies; or when he is adjudicated an insolvent; or where the shareholder is a company it goes into liquidation. On the death of a shareholder, his shares vest in his legal representative.
Transmission of shares takes place when registered member dies or is adjudicated insolvent or lunatic by competent court. … In absence of such provisions, Company will follow Regulations 23 to 27 of Table F to govern the provision of Transmission of shares.
Step 1: Obtain share transfer deed in the prescribed format. Step 2: Execute the share transfer deed duly signed by the Transferor and Transferee. Step 3: Stamp the share transfer deed as per the Indian Stamp Act and Stamp Duty Notification in force in the State.
Basic Procedure for the Transmission of Share
In the case of joint holding or legal heir, the survivor who wants transmission by operation of law needs to file a simple application with the company. Relevant documents such as Death certificate, succession Certificate, probate, etc.
Transmission of shares occurs when the shares of a deceased share holder are inherited or bequeathed to an heir or personal representative of the deceased shareholder.
(a) Where the securities are held in single name with a nominee: (i) Duly signed transmission request form by the nominee; (ii) Original or copy of death certificate duly attested by a notary public or by a gazetted officer; (iii) Self attested copy of PAN card of the nominee.
The above-discussed feature is what differentiates private companies from public companies, which have no restrictions on the right of their members to transfer their shares. Section 111A(2) provides that the shares or debentures of a public company shall be freely transferable.
Transfer of shares without consideration or at a price lower than the fair market value (FMV) does not attract Section 56(2)(vii) of Income Tax Act, 1961.
For being about to transfer shares, the shareholder would require the board members’ approval and the approval of all the other shareholders in the company. Once this is done, the share transfer form is filled in, and the new share certificate is issued accordingly to the person getting the shares.
Execution of transfer deed is not required in case of transmission of share. Valid documents is enough for share transmission process. As transfer deed is not mandatory then the question of payment of stamp duty does not arises.
1) Registering a nomination for a demat account helps eliminate the need for documents such as will, succession certificate for transmission of securities. 2) The nominee/legal heirs are required to have a DP account if not already there.
Transfer of share 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.
What are the rules governing the transfer and transmission of securities?
There are certain time limits under which transfer and transmission of securities takes place. A company shall not register the transfer of securities of the company other than the beneficial owners without a proper instrument of transfer. The time prescribed is 60 days from the date of execution.