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CA Finalist (Management Apprentice)     05 July 2015

Transfer & transmission of shares??

Dear All Corporate Professionals outthere, need your opinion on this:

Transfer & Transmission provisions are covered u/s 56 of CA,2013 and u/s 108,109,110,111,113 in CA,1956.

For transmission of shares of deceased, which is by operation of law, we follow the provisions and procedure of sec 111 of CA,1956, and that specified in CA, 2013.  Its a procedure which normally every person follows. 

Ex: If A (deceased person) died, his legal heir, say B (deceased's son) would get the shares of his dad. The procedure is something like, submitting a death certificate, Legal heir certificate, Affidavit, Indemnity bond, Application for transmission, etc.,

But however, my question now is:  Say if A (deceased person) is dead, and his Legal Heir Son B, doesnot want to want to follow the normal procedure of Transmission, and instead of going through all those formalities, wants to Transfer to another person, say C (who is not a legal heir & a 3rd party). 

So, without following all those transmission procedures, can the shares of deceased be transferred directly to C, with C giving the consideration to B, and registering C as a member in the Registers of Company.?? 

If yes, what would be the procedures? which laws shall be referred to, if any. 

I hope you all get my question correctly. 

Need your reply at the earliest. Thanks in advance.



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 3 Replies

Venkat Iyer (CEO)     17 July 2015

Dear Sir,

Case:Holder 1 expired in 2010
         Holder 2 expired in 2011  
 
The Succession Certificate is applied in 2013 in the name of Holder 1,missing Holder 2 who died year after.This is thru indvertance.Company "A" has requested the legal heir to incorporate the Holder 2's name as the Holder 2 died after Holder 1.Theoritically, the company "A" may be correct in asking for incorporation of the Holder 2 name.However inview of the time lag & understanding of the court, the court may/may not incorporate the name & further the procedure is a cumbersome one.
 
In view can any company waive & condone the incorporation of missed names & process the Transmission of Shares. Pl quote the relevant section or any judgement of any Court to explain the company"A" accordingly.
Pl advice.
 
 

CA Finalist (Management Apprentice)     18 July 2015

Hello Sir,

What kind of a company is Company "A" ???

Were Holder 1 and Holder 2 members/ Joint holders of Company "A" ??

Now that Holder 1 and 2 expired, does the company want to transmit the shares, in the name of Legal Heir ??

Do you want Legal Heirs name to be incorporated in the Register of Members of the Company A ???

Honestly, I am not able to get your question correctly.

Kindly reframe your question in brevity.

Regards,

Venkat Iyer (CEO)     19 July 2015

The legal heir in not a party to the shares,but only a claimant thru the transmission.The company "A" is a Ltd multi crore company.The legal heir had applied for transmission by submitting the DC,SC & other documents.Incidentally the SC bears the name of holder 1 who died 1st while the name oh holder 2 is missing.The company "A" is asking for incorporation of name of Holder 2.Can the company "A" waive the incorporation & process the transmission.If so, under what rule of the companies act or, take relief of any courts order or judgements


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