How to transfer shares from name of dead wife

Save Share

This query is : Resolved

Nagaraj NK (Querist)

27 October 2012 Hello friends:

I would like to seek your guidance on a problem my uncle is facing.

The facts are: My uncle had purchased a number of shares of various companies in his wife's names some 15-20 years ago. About four years back, his wife died leaving no children.

1) How can my uncle get the shares transferred to his name? What is the procedure to be followed?

2) Some of the companies whose shares have been purchased are no longer in existence. Does it mean that the shares are worthless now, or is the shareholder entitled to take the proceeds of the winding up of the company? From whom can the proceeds of the winding up of the company be collected?

3) My uncle had bought shares of about 1 lakh of IDBI bank in his wife's name about 10 years ago, and now those shares have been misplaced/lost since about 5 years. How to find out the serial numbers of the shares lost, and how to reclaim those shares? Can we approach the company giving the name of the shareholder and asking them to search for shares in their names?

4) Some shares used to bring dividends for my uncle till about 5 years ago. But since he shifted his house, he has no longer been receiving any dividends. Is it possible to recover the arrears of those dividends?

Thank you for your time and consideration.

Ajay Mishra

Ajay Mishra (Expert)

31 October 2012 Hi

Section 108(1) of the Act states that nothing in section 108 shall prejudice any power of the company to register as holder of shares or debentures any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law. It is not necessary to have any instrument of transfer executed for the purpose of transmission of shares.
Where title to the shares comes to vest in another person by operation of law, it is not necessary to submit transfer form. [Life Insurance Corpn. of India v Bokaro & Ramgur Ltd. (1966) 36 Comp Cas 490 (Del].
The procedure provided under sections 108 to 111 is not applicable to transmission of shares by order of a Court. [Hanuman Mills (P) Ltd., In re (1977) 47 Comp Cas 644 (All)].

Regards

Ajay Mishra

Ajay Mishra (Expert)

31 October 2012 Requirement of documents 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 along with the following necessary evidences is sufficient:—

(i) Certified copy of death certificate;
(ii) Succession certificate;
(iii) Probate;
(iv) Specimen signature of the successor.

However, requirement of these certificates is not essential and depends on various circumstances of the case. Where a succession certificate has been granted in respect of shares, the company cannot insist on the production of probate or letters of administration; the certificate affords full indemnity to company. [Thenappa Chettiar v Indian Overseas Bank Ltd. (1943) 13 Comp Cas 202 (Mad)].

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

Ajay Mishra

Ajay Mishra (Expert)

31 October 2012
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.
38.1. Transmission could be effected without succession certificate in case of small holdings.

In the case of small holdings, transmission of securities may be considered and effected by a company without obtaining succession certificate. However, the Board of directors should ensure that sufficient evidence has been produced by the legal heirs. The following documents are required to be submitted to the company:—
(a) Certified copy of a death certificate.
(b) Particulars and signature of all legal heirs.
(c) Affidavit on non-judicial stamp paper certified by a first class magistrate or notary public.
(d) Deed for disclaimer.
(e) Indemnity bond on non-judicial stamp paper.

It would be in order for the Board to register transmission of shares by obtaining indemnity bond rather than insisting upon production of succession certificate.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now