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Transmission of Shares as per Companies Act 2013

1. Transmission of shares U/s 56(2,4) of the companies Act 2013, means “transfer” of title by the
operation of law when there is death of the shareholder. A transmission of interest in shares of
a company, of a deceased member of the company, made by the legal representative of a
deceased member shall be considered as transmission of shares by operation of law. This
transmission will be registered by a company in the Register of Members.
2. Procedure for the Transmission of Shares
The procedure for the transmission of the shares of the company is given in the articles of
association of the company. Table F (ARTICLES OF ASSOCIATION OF A COMPANY
LIMITED BY SHARES)1 is adopted in case of transmission of shares. The basic steps to be
followed are:
a. On the death of a member, the survivor or survivors where the member was a joint
holder, and his nominee or nominees or legal representatives where he was a sole
holder, shall be the only persons recognised by the company as having any title to his
interest in the shares. It shall not release the estate of a deceased joint share holder from
any liability in respect of any share which has been jointly held by him with other
persons.
b. After the heir/nominee of the deceased/bankrupt shareholder becomes eligible for the
transmission of the shares, he/she shall produce such evidence as required by the board
and either be entitled to have the shares be transmitted in his name or is eligible to make
the transfer to any other person as required.
c. The person to whom the shares have been transmitted shall have the same right over
the dividends and interest which he would have been entitled had he been the
shareholder of the company.
d. There is no requirement of a transfer deed. An application made to the company along
with the relevant documents would be an enough proof to give effect to the
transmission of shares since the procedure of transmission happens through operation
of law. A simple application to the company by a legal representative along with the
following necessary evidences is sufficient:
i. Certified copy of death certificate;
ii. Succession certificate;
iii. Probate;
iv. Specimen signature of the successor.

1
http://www.mca.gov.in/SearchableActs/Schedule1.htm
e. Section-56(4): Every company, unless prohibited by any provision of law or of any
order of any Court, Tribunal or other authority, shall, within One month deliver, the
certificates of all shares transmitted after the application for the registration of the
transmission of any such shares received.