The word “transmission” is defined as the passing of a property /asset by operation of law. In the case of the death of a shareholder, the process of transfer of ownership / right of shares to the legal heirs or successors is called as Transmission of shares. If a person dies and leaves a Will, it is referred to as testamentary succession. However, if a deceased person did not leave a will, it is called intestate succession. In the case of testamentary succession, the legal heirs must turn to the competent courts to obtain the probate of the will. In the case of intestate succession, a certificate of inheritance must be applied for at the court in which the deceased had his or her permanent residence which is referred to as the Succession Certificate.
Transfer of shares
Transmission of shares
It means transferring the share from one person to another person. |
It is voluntary action. |
It is done to sell share or give shares as gift. |
There are two parties transferor and transferee. |
It requires instrument of transfer. |
It requires stamp duty. |
It can be cancelled by the company. |
It means transfer of shares by operations of law. |
It is compulsory action. |
It is done in case of death, insolvency or lunacy of shareholder. |
There is only party i.e. legal representative. |
It does not require instrumental of transfer |
It does not required stamp duty. |
It cannot be cancelled by the company. |
Difference between Transfer & Transmission of shares
The fundamental question that raises in the field of shares is the difference between the transfer of shares and the transmission of shares.
Probate of Will:
When a person dies after leaving a will, it is called testamentary succession. In this case the executor of the Will needs to obtain a probate of the Will from the court for the transfer of the deceased’s property / assets.
Succession Certificate:
A Succession Certificate is issued to the successor of a deceased person who has not made a will, to establish the rights of the successor. Succession Certificate gives the holder of the certificate the authority to dispose of the debts and securities of the deceased. It is issued by the district judge of the competent court.
LOA (Letter of Administration):
An official court document issued to give power of attorney to a person to administer the entire estate of a deceased person. It is issued when a person dies at death (without leaving a will). The letter of administration gives the person the right to administer the estate of a deceased person. If there is no executor, the beneficiary can apply to the court for a letter of administration.
Legal Heir Certificate or Surviving Member Certificate:
In the event of the death of a family member, his legal heirs might require an authentic document to determine who are the legal heirs or surviving members to the deceased in the form of a Legal Heir Certificate or Surviving Member Certificate.
You might think that the process of transmission is overwhelming and never-ending. Simply contact our Legal Experts at IEPF Adviser and we will assist you throughout the transfer process
How IEPF Adviser will help you in Transmission of shares:
Experience legal professional across India will first understand your matter in detail including the jurisdictions & laws governing your case
Understand the Family Tree & the inheritance laws governing the transfer of shares
Determine which documents is required for transmission of shares amongst Probate of Will, Succession Certificate, LOA or Legal Heir Certificate depending upon value of shares & availability of will
Communicate with companies / RTA to obtain relevant letters & procedure for transmission of shares
Compiling a complete list of investments & details required for obtaining a wholesome court order relevant to the case
Preparing documents for transmission of shares once the court order / is obtained