My query is- in case of unlisted public Ltd company, when a shareholder died , and his legal heirs do not want to continue to be shareholder of the company & wants to transfer the shares to some one else. Kindly answer
a)Is such transfer can be possible?
b) what will be the procedure & documentation for such transfer?
C)who will sign the transfer deed on behalf of the died person?
d)what in case, if a died shareholder leaves a gift deed in the name of any other person?
05 May 2011
Answers to your questions: a) Such transfer is not possible directly. First, the shares are transferred to the nominee / legal heir i.e. transmission and then the nominee / legal heir after becoming the shareholder can transfer the shares.
b) Procedure is first transmission, then transfer.
c) Not applicable.
d) Generally a gift deed is not a secret document. It is given at the time of gifting and the shares are transferred subsequently. However, i think you want to convey that "What if the deceased person has left the shares through the will to a specific person". In this case, the said person shall be riding over nominee mentioned in the shares as well as over the legal heir and the procedure of transmission shall be carried out to transfer the shares in his name.
It means firstly transmission of shares is to be taken after that transfer can be done. It also means that person whose name is mention in the Gift deed will act upon the transmission process and not the legal heir. Further I wish to know - If in case at the time of gifting, no transfer was carried or may be gift deed was found after death of the shareholder then a) Can Gift Deed be treated as 'will to a specific person’? b) Shall Transmission fall under the category of ‘deceased person has left the will "? Please clarify?
05 May 2011
Gift deed is not an agreement to transfer. The shares should be transferred by the holder to the receiver of gift. Whether it will be treated as "will to specific person" is a question of fact.
Secondly, transmission is always after the death of the holder. So transmission shall fall under the category of 'deceased person has left the will'
05 May 2011
If person whose name is mention in the Gift Deed, wants to become shareholder in place of deceased person in that case there is any involvement of legal heir in the process of transmission? Or simply just application by person (whose name is mention in the Gift Deed) & documentation of copy of Death certificate, copy of deed will suffice the transaction.
05 May 2011
Succession certificate is required when the deceased person has not prepared his will and the shares will be default be transferred to the legal heir or the nominee as registered in the company. Also, the beneficiary of the will rides over the nominee or the legal heir.
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