Max Payne (employed) (2574 Points)
24 June 2010Hi
Is there any provision for UNLISTED company, that
if the no of shares requested to be transmitted is less than 500,
or has total value below Rs.1,00,000,
The company can acknowledge the transmission on the basis of Affidavit and indemnity bond,
without insisting the succession certificate or probated will??
Pls reply soon...
Advance Thanks and regards
Yogesh Bhatt
(Company Secretary)
(475 Points)
Replied 24 June 2010
Hi, Dear Read this Section :
109b(1) Any person who becomes a nominee by virtue of the provisions of section 109A, upon the production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either-
(a) To be registered himself as holder of the share or debenture, as the case may be; or
(b) To make such transfer of the share or debenture, as the case may be, as the deceased shareholder or debenture holder, as the case may be, could have made.
So. Board may decide which document is necessary if they feel they need not succesion ceti or probate they can transfer.
khushboo
(CS)
(234 Points)
Replied 24 June 2010
IF SHARES ARE RECEIVED FOR TRANSMISSION THEN SUPPORTING DOCUMENTS MUST REQUIRED TO BE ATTACHED WITH APPLICATION.
ON THE BASIS OF SUCH DOCUMENTS ONLY, BOARD CAN DECIDED WHEATHER TO TRANMIT THE SHARES OR NOT.
Yogesh Bhatt
(Company Secretary)
(475 Points)
Replied 24 June 2010
Dear Khusbu Pls read language of law : upon the production of such evidence as may be required by the Board and if we analys this part that is to better
so.
It is descreation on Board which document is necessary for transmission.
Max Payne
(employed)
(2574 Points)
Replied 24 June 2010
Hi Yogesh Sir and Khushboo Madam
I wanted to know if special 'relaxation of documents' provision is there?
I came to know that normally, we need the probate or succession certificate along with the other documents like Transmission form and request, indemnity bond, affidavit and NOC of the other heirs....
Actually where is it said in companies act that so and so documents are required.... I think this is the normal succession procedure?
Needed a confirmation from the learned members of the process required.
(No of shares involved here = 500 nos of FV Rs.10 each,
Company has less net worth than paid up capital)
Yogesh Bhatt
(Company Secretary)
(475 Points)
Replied 24 June 2010
Dear Lucifer,
AS i mention provision u can read that it mention it is descreation on board which document is necessary so board need not that cerificate and they are satisfy on ther personal ground and personal relation than they can transfer. but if any problem occured after trasmission or it might wrong transmission then they will be default so it is better to confirm by all necessary evidence and then go through for transmission.
khushboo
(CS)
(234 Points)
Replied 24 June 2010
Plz find herewith attached SS_6 Issued by ICSI
SECRETARIAL STANDARD ON TRANSMISSION OF SHARES.
It wll solve your query fully
Yogesh Bhatt
(Company Secretary)
(475 Points)
Replied 24 June 2010
Dear Khusboo.
AS is not mandatory and applciatble yet.even same is mention in AS that :
To facilitate transmission of Shares in appropriate cases, the company may waive production of certain documents, such as Probate or Letter of Administration or Succession Certificate. However, in such cases, the company may insist on a suitable Indemnity and affidavit.
I hope now concept might clear.
As per the Companies Act, 1956 It is compulsory to have some kind of Evidence for Transmission of shares.
So, Even if the Company wants to transfer only 1 Share then such evidence is required. Company can not solely on the basis of Application by the Nominee transfer the Shares.
Moreover, The Supporting evidences are mentioned in the Articles of Association, If the AOA is silent then the Table A will apply, and the Shares are transmitted in that manner.
Moreover, look at the Provisions of the Listing Agreement also for the transmission procedure
So, In your case Company cannot transmit the Shares without having any kind of EVIDENCE. Evidence is must.
Advise: One thing also to be kept in the mind that As the amount of the Share Value is less, so Board can adopt some different Procedure for transmission, That is totally wrong..
Because Form Someone 1 lac Rs. Doesn’t matter at all, For someone It matters, But not that Much and for someone feels like Bill Gates when he has 1 Lac Rupees.
Just apply the fair business prudence to each transaction; Because Small Shareholders are also the owner of the Small part of the Company.
Everyone’s small contribution in the Company makes the Company Big…
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Ankur Shah (Practicing Company Secretary)
Ahmedabad, Gujarat - 380015
Mobile: +91-90330 03922, 94276 33901
E-Mail: ankur @ csankur.com
Website: www.csankur.com
Blog: www.csankur.blogspot.com
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