When an investor passes away or becomes incapable of managing their securities, the ownership of their shares needs to be legally transferred to their legal heirs or nominees. This process is known as Transmission of Shares.

Unlike transfer of shares, which involves a voluntary act between two parties, transmission is an involuntary process governed by law and corporate regulations. If you’re a shareholder or a nominee looking to understand this, let’s break it down in a simple and easy-to-follow manner.

What is Transmission of Shares?

Transmission of Shares refers to the legal process through which ownership of shares is passed on due to death, insolvency, or mental incapacity of the shareholder. This process ensures that the rightful heir or nominee gets legal ownership of the shares without having to execute a transfer deed.

Unlike a transfer, where consideration (payment) is involved, transmission happens without any consideration. The company updates its records based on valid documents like a death certificate, succession certificate, or probate of will.

Importance of Understanding Transmission of Shares

• Smooth inheritance: Helps family members or legal heirs claim ownership without complications.

• Legal clarity: Prevents disputes over ownership of securities.

• Financial continuity: Ensures that dividends, rights issues, and other shareholder benefits reach the rightful owner.

If you or your family members hold shares in any company, knowing the Shares Transmission Procedure can save a lot of time and stress later.

Shares Transmission Procedure: Step-by-Step Guide

The Shares Transmission Procedure is fairly straightforward if you have the required documents in place. Here’s how it works:

1. Intimation to the Company

The legal heir or nominee must inform the company about the shareholder’s death or incapacity. This is done by submitting a formal request along with supporting documents.

2. Submission of Documents

The company usually requires the following:

• Death certificate of the shareholder

• Succession certificate or probate of will (in case of multiple claimants)

• Share certificates (if physical shares)

• Identity and address proof of the claimant

3. Verification by the Company

The company verifies all submitted documents. If everything is in order, they will process the request without delay.

4. Endorsement of New Owner

Once approved, the company records the name of the new shareholder in its register. If shares are in demat form, the depository participant updates the records electronically.

Difference Between Transfer and Transmission of Shares

• Transfer: Voluntary, involves consideration, requires transfer deed.

• Transmission: Involuntary, occurs by law, no transfer deed or consideration required.

Understanding this difference ensures you don’t confuse the two processes.

Why Timely Transmission of Shares Matters

• It prevents legal complications in the future.

• Ensures uninterrupted access to dividends, bonuses, and voting rights.

• Protects family members’ financial security.

If shares remain unclaimed for long periods, they might even get transferred to the Investor Education and Protection Fund (IEPF), which requires additional steps to recover.

Final Thoughts

The Transmission of Shares is a critical process that ensures rightful heirs or nominees receive ownership without unnecessary hurdles. By following the correct Shares Transmission Procedure, you can make sure the process is smooth and legally valid.

If you are facing challenges in understanding or executing the transmission process, professional guidance can save you valuable time. Don’t wait until it becomes complicated—get the process started today.

👉 To learn more or get expert help in completing your share transmission smoothly, visit Share Claimers and secure your financial future with hassle-free support.