Share Transfers

adv. rajeev ( rajoo ) (Expert) 22 March 2010
Mr. B has to apply for the share transfer to the company by submitting the share transfer certificate along with the death certificate of A. First share has to transfer physically. If there is nominee shares will be transferred to him.

Manish Singh (Expert) 22 March 2010
Dear Mr. Shah,

I am reproducing the provisions in case of transmission, issued by ICSI (charted accountants) of shares in the case of death.
you need to get succession certificate but since this will take a long time you may request the company to do away with the said requirement.

"Transmission of Shares should be effected by the company on receipt of intimation of death of a Member and on production of necessary documents, such as -
(i) Death certificate;
(ii) Request for transmission signed by the legal heir(s) / Legal
Representatives /claimant(s) with their specimen signature(s);
(iii) Succession Certificate or Letter of Administration or Probate of Will;
(iv) Original share certificate(s);
(v) Orders of the Court or of competent authority, if applicable;
(vi) Permission under the Foreign Exchange Management Act, 2000, if applicable.
The company may require documentary evidence to prove the identity of the legal heir or other claimants, such as PAN Card, Passport, Ration Card, Voterâ€™s Identity Card, etc.
The documentation required for effecting Transmission of other securities including fixed deposits would remain the same.
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.
Section 109 provides for transfer of the Shares by the Legal Representative of the deceased Member.
Section 109A provides for nomination by an individual in respect of his Shares. Where a Nominee has been appointed, the Shares shall vest in the Nominee on the death of the Member.
As per Section 109B, on death of the shareholder, the Nominee has the option to elect either to register himself as the holder of the Shares of the deceased or transfer the Shares to any other person. The transferees need not be the legal heirs of the deceased shareholder(s).
Similar rights are available to a person becoming entitled to Shares consequent to the insolvency of a Member in cases of companies having provisions akin to Regulation 26 of Table A of Schedule I to the Act in their Articles. - 8 -
Nomination assumes significance in transmission. The company should maintain particulars of the Nominee in a separate register and confirm to the shareholder of having noted the nomination. It is recommended that this
information is also recorded in the Register of Members with cross-reference to the register maintained for recording nomination.
In case the Nominee is a Minor, on death of the shareholder during the minority of the Nominee, the Shares should be transmitted to the Minor under the guardianship as mentioned in the nomination form till the Minor attains majority; however, the beneficial interest will be with the Minor.
In case the Shares were held by a lunatic or insolvent, the company may insist on an order of a Court of competent jurisdiction declaring such person to be of unsound mind or insolvent and appointing a Legal Representative or Administrator as the case may be to deal with his estate.
If the Articles of the company provide otherwise, it shall override the principles of the Standard."