What Is Transmission Of Shares?

Transmission of Shares:- Transfer of shares by the operation of law is known as Transmission of Shares. Transmission of shares takes place in case of death, insolvency or insanity of members of the company. In case of transmission of shares, there is no need to fill the ‘Transfer Deed’.

On the happening of the any of the above events i.e. death, insolvency or insanity, the shares are transferred to the legal representatives of shareholders. The legal representatives may also differ depending on the existence of ‘Will’ of the deceased partner. If the deceased shareholder has left behind any ‘Will’, then the shares will be transferred to the person mentioned in it. In the absence of such ‘Will’, the transfer of shares will be made in favor of legal heir of the deceased member. ‘Official Receiver’ or ‘Official Assignee’ becomes the legal representative of insolvent member. In case of Insanity of shareholder, his guardian becomes the legal representative.

As legal representative is entitled to become the member of the company, he files an application to the company for the transmission of shares on his name. He may also choose to sell the shares instead of becoming a member of the company.

Written by Lucas Beaumont

Generalist. Wikipedia contributor. Elementary school teacher from Saskatchewan, Canada.

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