Transfer of share

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Nilesh Dhameliya (Querist)
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14 March 2012 IS FORM NO 7B REQUIRED IN CASE OF TRASFER OF SHARE BY OPERATION OF LAW IN PVT.LTD. COMPANY (IN CASE OF DEATH OF SHARE HOLDER).
WHAT IS THE DIFFERENCE BETWEEN TRANSFER DEED AND TANSFER FORM (7B).

Ajay Mishra

Ajay Mishra (Expert)
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14 March 2012 Hi

No. Section 108(1) of the Act states that nothing in section 108 shall prejudice any power of the company to register as holder of shares or debentures any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law. It is not necessary to have any instrument of transfer executed for the purpose of transmission of shares.
Where title to the shares comes to vest in another person by operation of law, it is not necessary to submit transfer form. [Life Insurance Corpn. of India v Bokaro & Ramgur Ltd. (1966) 36 Comp Cas 490 (Del].
The procedure provided under sections 108 to 111 is not applicable to transmission of shares by order of a Court. [Hanuman Mills (P) Ltd., In re (1977) 47 Comp Cas 644 (All)].

Regards

Ajay Mishra

Ajay Mishra (Expert)
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14 March 2012 Hi

Requirement of documents 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 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.

However, requirement of these certificates is not essential and depends on various circumstances of the case. Where a succession certificate has been granted in respect of shares, the company cannot insist on the production of probate or letters of administration; the certificate affords full indemnity to company. [Thenappa Chettiar v Indian Overseas Bank Ltd. (1943) 13 Comp Cas 202 (Mad)].

Since the transmission is by operation of law, neither consideration for transfer nor stamp duty is required on instruments for transmission.

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Guest

Guest (Expert)

14 March 2012 Form 7B is not required in case of operation of law i.e. death. It is required in case of transfer of shares.

In case of death, transmission of shares is done on the strength of succession and death certificate.

Thanks

Jiten Gupta

Jiten Gupta (Expert)
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15 March 2012 Agree with Ajay Ji!!!

Guest

Guest (Expert)

15 March 2012 Ajay Jee,

When the shares are gifted, form 7B will be filled in that case.

My query is whether stamp duty 0.25% will be paid on the form 7B on the basis of market value of shares since consideration is nil?

With Regards, Neha

Ajay Mishra

Ajay Mishra (Expert)
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15 March 2012 Hi Neha

If you are making transfer of quoted shares as a gift then check whether any consideration is given by transferee or not. If consideration is nil then you will not required to pay stamp duty on such transfer. But gift deed must be registered with concerned authority. Without registered gift deed, company can not register the transfer same.

Regards

Guest

Guest (Expert)

15 March 2012 But in one of my case a listed company has registered transfer of gifted shares in form 7B confirmed in which consideration was nil, no stamp duty was paid and gift deed was not sent to the company.

Pls advise

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Ajay Mishra

Ajay Mishra (Expert)
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15 March 2012 Hi

Strange, how it will be possible, because how company knows that the shares are transfer as a gift.

Regards

Guest

Guest (Expert)

15 March 2012 Hi,

In the consideration column, gift was mentioned.

Regards