15 November 2010
what is the procedure of share transfer in a private limited company in case of death of the main shareholder and shares to be transfered to his legal heire?
15 November 2010
https://www.caclubindia.com/articles/transfer-of-shares-procedural-analysis-4692.asp
It is all about TRANSMISSION OF SHARES
Transmission of shares
A transmission of shares or other interest in a company of a deceased member thereof made by the legal representative of a deceased member of the company shall be considered as transmission of shares by operation of law and will be registered by a company in the Register of Members. Execution of transfer deed not required in case of transmission of shares
Transmission shall be subject to the liabilities, if any In the case of a transmission of shares, shares continue to be subject to the original liabilities, and if there was any lien on the shares for any sums due, the lien would subsist, notwithstanding the devaluation of the shares.
Requirement of documents/evidences for transmission of shares Where title to shares comes to vest in another person by operation of law, it is not necessary to execute and submit transfer deed. A simple application to the company by a legal representative alongwith the following necessary evidences is sufficient:— (i) Certified copy of death certificate; (ii) Succession certificate; (iii) Probate; (iv) Specimen signature of the successor.
No requirement of consideration and payment of stamp duty Since the transmission is by operation of law, neither consideration for transfer nor stamp duty is required on instruments for transmission.
15 November 2010
Procedure for transmission of shares
(i) The survivors in case of joint holding can get the shares transmitted in their names by production of the death certificate of the deceased holder of shares. The company records the particulars of the death certificate and a reference number of recording entry is given to the shareholder so as to enable him to quote such number in all future correspondence with the company.
(ii) If a member of a company dies and he leaves after him a will or letter of administration then the survivors shall get a copy of 'will' certified under the seal of a Court of competent jurisdiction. The certified copy of the will is called a 'probate' and it shall be forwarded to the company.
(iii) If a member of a company dies without leaving a will, then succession certificate issued by a Court of competent jurisdiction shall be submitted to the company.
(iv) In case a member of a company becomes bankrupt, the official receiver shall produce documentary evidence of his appointment from a competent Court. Right to dividend, rights shares and bonus shares to legal representative shall be kept in abeyance
Appeal against refusal to register transmission of shares The transferee, or the person who gave intimation of the transmission by operation of law, as the case may be, may appeal to the Company Law Board/Tribunal against any refusal of the company to register the transfer or transmission or against any failure on its part as stated under section 111(1) of Companies Act, either to register the transfer or transmission or to send notice of its refusal to register. [Section 111(2)]
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