corporate law

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disha makwana (Querist)
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11 June 2010 For what's purpose power of attorney is used?
For transmission of share power of attorney is used or NOC certificate.
To take probate or succession certificate How much time is required?

Ankur Garg

Ankur Garg (Expert)
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11 June 2010 TRANSMISSION OF SHARES

Transmission of shares

A transmission of shares or other interest in a company of a deceased member thereof made by the legal representative of a deceased member of the company shall be considered as transmission of shares by operation of law and will be registered by a company in the Register of Members.

Execution of transfer deed not required in case of transmission of shares
Transmission shall be subject to the liabilities, if any

In the case of a transmission of shares, shares continue to be subject to the original liabilities, and if there was any lien on the shares for any sums due, the lien would subsist, notwithstanding the devaluation of the shares.

Requirement of documents/evidences for transmission of shares
Where title to shares comes to vest in another person by operation of law, it is not necessary to execute and submit transfer deed. A simple application to the company by a legal representative alongwith the following necessary evidences is sufficient:—

(i) Certified copy of death certificate;

(ii) Succession certificate;

(iii) Probate;

(iv) Specimen signature of the successor.

No requirement of consideration and payment of stamp duty

Since the transmission is by operation of law, neither consideration for transfer nor stamp duty is required on instruments for transmission.

Regards

Ankur Garg

Ankur Garg (Expert)
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11 June 2010 Procedure for transmission of shares

(i) The survivors in case of joint holding can get the shares transmitted in their names by production of the death certificate of the deceased holder of shares. The company records the particulars of the death certificate and a reference number of recording entry is given to the shareholder so as to enable him to quote such number in all future correspondence with the company.

(ii) If a member of a company dies and he leaves after him a will or letter of administration then the survivors shall get a copy of 'will' certified under the seal of a Court of competent jurisdiction. The certified copy of the will is called a 'probate' and it shall be forwarded to the company.

(iii) If a member of a company dies without leaving a will, then succession certificate issued by a Court of competent jurisdiction shall be submitted to the company.

(iv) In case a member of a company becomes bankrupt, the official receiver shall produce documentary evidence of his appointment from a competent Court.
Right to dividend, rights shares and bonus shares to legal representative shall be kept in abeyance

Regards

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