Transfer of Shares in Case of Death of the Holder: All Details

Transfer of Shares in case of Death of the Holder, This article tells you about the requirements under the companies act, when any share holder or a member.

Rakesh Saini

Transfer-of-Shares-in-case-of-De

Transfer of Shares in Case of Death of the Holder, This article tells you about the requirements under the Companies Act, when any shareholder or a member died how the transmission of the shares be made to the legal heirs or the nominees of such a dead person and what are the documents required for it. It also tells you about the consequences of not following the same. Now you can scroll down below and check more details regarding “Transfer of Shares in case of Death of the Holder” Check out BOI Balance Enquiry Number.

Transfer of Shares in Case of Death of the Holder

Transmission of Shares:

The word transmission refers to the transfer of the shares where the shares have to be compulsorily transferred to such person as may be required. Section 56(2) says that “Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such rights have been transmitted.”

Documents required for transmission:

The shares may be held in any form such as physical form or the demat form. We will clarify each as follows:

1. If shares are held in Demat form:

Two cases are also there – When there is a nominee mentioned or where there is no one mentioned. Each is explained here separately.

A. Where there is nomination If there is already a nomination by the deceased person then the following documents are to be sent to the depository participant.

  • Transmission request form (TRF)
  • Death Certificate (Notarized)

B. Where there is no nomination Where the value of the shares is up to Rs. 1 lakh, the following documents are required.

  • Transmission request form (TRF)
  • Death Certificate (Notarized)
  • Indemnity Deed
  • Affidavit for the transfer of legal ownership
  • No Objection Certificate from the legal heirs.

Where the value of the shares is more than Rs. 1 lakh, the following documents are required.

  • Probated Will
  • Certificate of Succession
  • Surety Form.

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2. If shares are held in Physical Form

There can be two cases are there – When there is nominee mentioned or where there is no nominee mentioned.

Where the nominee is mentioned by the holder of the shares, the following documents are required:

  • Share Certificate (Original)
  • Transmission request form (TRF)
  • Death Certificate (Notarized)
  • Affidavit for the transfer of legal ownership

Where the nominee is not mentioned, the following documents are required:

  • Transmission request form (TRF)
  • Death Certificate (Notarized)
  • Indemnity Deed
  • Affidavit for the transfer of legal ownership
  • No Objection Certificate from the legal heirs.

Non Compliance of the Act:

Every company must follow such procedure accept such applications by the shareholders and transfer such shares within the prescribed time limit. If the company is found defaulting in such cases, there can be a fine which shall not be less than Rs. 25,000 which can extend up to Rs. 5,00,000. Every officer shall also be said to be in default if such officer is found guilty, for which fine shall not be less than Rs. 10,000 which can extend up to Rs. 1,00,000. You may also like Bank Holidays in India.

Important issues in this topic:

  • In case of the joint ownership of the shares, the other owner shall produce the joint ownership of the shares by showing the share certificate and transmitting the shares in his name.
  • There can be two possibilities with the company once the company receives the application from the person. One is that it can accept the application and transfer the shares. If a company is not satisfied, it will not transfer, but it will have to communicate such facts to the concerned person within 30 days from the date of receipt of the application.
  • Stamp duty will not apply to the transfer of such shares as such transfer is in the form of transmission.

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