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What does Transmission of shares mean?

While the transfer of shares relates to a voluntary act of the shareholder, transmission is brought about by operation of law. The word 'transmission' means devolution of title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy, marriage, etc. 

While the transfer of shares is brought about by delivery of a proper instrument of transfer (viz, transfer deed) duly stamped and executed, transmission of shares is done by forwarding the necessary documents (such as a notarized copy of death certificate) to the company.

On registration of the transmission of shares, the person entitled to transmission of shares becomes the shareholder of the company and is entitled to all rights and subject to all liabilities as such shareholder.

Transmission in case of death of account holder can happen under the different scenarios mentioned below:

  1. The deceased’s account has no holdings and no funds
  2. A joint account holder exists
  3. The account holder has appointed a nominee
  4. The account holder has not added a nominee to their account but has holdings.

-Holding value less than 5lakhs

-Holding value more than 5lakhs

Each scenario has different procedures that need to be followed. To learn the transmission process under these scenarios, check out this article.