12 November 2009
After the death of the directors, if his all shares is transferred to his wife or i should say transmission of shares, then in that case what formalities should be done except filing form 32 for the cessation of directorship? kindly clarify this in detail and mention the relevant section also.
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.
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
(i) Transmission is devaluation of title by operation of law.
(ii) No instrument of transfer (Transfer Deed) is necessary.
(iii) If there was any lien on the shares or any original liabilities, it would subsist even after transmission.
(iv) A simple application with certain documents such as death certificate, succession certificate, probate, etc., depending upon various circumstances may be sufficient for transmission.
(v) In case of joint holding, the survivor or survivors shall only be entitled for registration and the legal heir of the deceased member shall have no right or claims.
(vi) Dividend declared before the death of the shareholder will be payable to legal representative but dividend declared after the death of a member can be paid to him only after registration of his name and till that period it has to be kept in abeyance.
(vii) Succession certificate is not required when probate or letter of administration is issued.
(viii) Once succession certificate is granted, it provides full indemnity to the company to transmit the shares by operation of law.
(ix) In case of amalgamation, no instrument of transfer is required to be executed.
(x) In case of shares of a private company, if company refuses to register transmission, notice of such intention within two months giving reasons must be sent by the company to the person sending intimation.
(xi) Remedies provided under section 111 are no longer applicable on listed/unlisted public companies.
(xii) New section 111A abrogates the right of the public company to refuse registration of transfer/transmission of share and debenture on any grounds.
(xiii) The companies, after registration of transfer, may approach the Company Law Board/Tribunal for an order of rectification in case the transfer is in contravention of any of the provisions of the Companies Act, 1956 or any other Act.
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