Share transmission/transfer
This query is : Resolved
01 August 2012
Dear Sir
I want legal view on if Mr. A is a share holder and he died then his shares can be nominated to his legal heir (i.e. Mr. B ) just by Application and requisite formalities i.e. Without Stamp Duty. But my Question is if the shares are directly transferred from Mr. A to Mr. C ( i.e.Mr. B’s Son ).Whether the Stamp duty is applicable? And what formalities are required to be followed?
Mr. B has no objection in it and ready to give affidavit on it. All documents are available.
WILL mentions nothing.
I want legal view on if Mr. A is a share holder and he died then his shares can be nominated to his legal heir (i.e. Mr. B ) just by Application and requisite formalities i.e. Without Stamp Duty. But my Question is if the shares are directly transferred from Mr. A to Mr. C ( i.e.Mr. B’s Son ).Whether the Stamp duty is applicable? And what formalities are required to be followed?
Mr. B has no objection in it and ready to give affidavit on it. All documents are available.
WILL mentions nothing.
02 August 2012
The exemption is given to legal heirs. C being grandson/daughter, stamp duty exemption is not available. It will amount to transfer from B to C. (Only thiong is we are avoiding the clerical work of transfer from A to B and then B to C.) Stamp duty does not aim at reducing clerical work.
03 August 2012
Dear Sir
Thank you so much
But My question is if the name of Mr. C is available in Proper Nomination made by the Mr. A at the time of acquiring the Shares in the Share Application and Share Certi..
Hence there is NO TRANSFER, and if no transfer Form how the stamp duty is applicable?
Thank you so much
But My question is if the name of Mr. C is available in Proper Nomination made by the Mr. A at the time of acquiring the Shares in the Share Application and Share Certi..
Hence there is NO TRANSFER, and if no transfer Form how the stamp duty is applicable?
25 July 2025
Here’s a legal view on your query regarding **share transmission and transfer after the death of a shareholder**:
---
### 1. **Difference Between Transmission and Transfer**
* **Transmission** is the **transfer of shares by operation of law**, e.g., on the death of a shareholder, the shares pass automatically to the legal heirs or nominees.
* **Transfer** is the **voluntary act of the shareholder transferring shares to another person** during his lifetime by executing a transfer deed (Form SH-4) and paying stamp duty.
---
### 2. **Shares Transmission on Death**
* When Mr. A dies, his shares **transmit to his legal heir (Mr. B)** or nominee **by operation of law**.
* Mr. B needs to apply to the company with:
* Death certificate of Mr. A
* Indemnity bond or affidavit (if required)
* Probate or succession certificate (if applicable)
* Nomination proof (if nominee registered)
* The company records the name of Mr. B in the **Register of Members** without requiring a transfer deed.
* **No stamp duty is applicable on transmission** because it’s not a transfer.
---
### 3. **Transfer of Shares from Legal Heir to Third Party**
* If shares are to be transferred from Mr. B (legal heir) to Mr. C (Mr. B’s son), it is a **normal transfer**.
* This requires:
* Execution of a **transfer deed (Form SH-4)** by Mr. B (transferor) and Mr. C (transferee).
* Payment of **stamp duty** on the transfer deed as per applicable Stamp Act.
* Submission of transfer deed to the company.
* Even if Mr. B has no objection and gives affidavit, **stamp duty is mandatory on transfer**, because it’s a voluntary transfer.
---
### 4. **Transfer Directly from Mr. A (deceased) to Mr. C**
* If shares are directly transferred from deceased Mr. A to Mr. C (bypassing Mr. B), this is **not legally valid as a transfer**, because Mr. A cannot transfer shares after death.
* Transmission must first happen in favour of legal heir or nominee.
* Any transfer before transmission is invalid.
---
### 5. **Nomination vs. Will**
* **Nomination**: The company recognizes the nominee only for receiving dividends and shares in case of death, but the nominee **does not become absolute owner** automatically.
* The nominee **holds shares in trust** until legal heir(s) prove their claim.
* **Will**: Shareholder can specify in his will the person(s) to whom shares pass.
---
### 6. **Summary Table**
| Situation | Stamp Duty Applicable? | Formalities |
| ------------------------------------------------------------------- | ---------------------- | ----------------------------------------------------- |
| Transmission from deceased (Mr. A) to legal heir (Mr. B) or nominee | No | Application with death certificate & docs |
| Transfer from legal heir (Mr. B) to third party (Mr. C) | Yes | Transfer deed (Form SH-4), stamp duty, board approval |
| Direct transfer from deceased (Mr. A) to Mr. C | Not valid | Transmission must happen first |
---
### **Conclusion:**
* **No stamp duty on transmission**, since it’s by operation of law.
* **Stamp duty applies on transfer** to any third party after transmission.
* Shares cannot be transferred directly from deceased shareholder to any other person.
---
If you want, I can help draft the **transmission application format** or **transfer deed (SH-4)** template for your use. Would you like that?
---
### 1. **Difference Between Transmission and Transfer**
* **Transmission** is the **transfer of shares by operation of law**, e.g., on the death of a shareholder, the shares pass automatically to the legal heirs or nominees.
* **Transfer** is the **voluntary act of the shareholder transferring shares to another person** during his lifetime by executing a transfer deed (Form SH-4) and paying stamp duty.
---
### 2. **Shares Transmission on Death**
* When Mr. A dies, his shares **transmit to his legal heir (Mr. B)** or nominee **by operation of law**.
* Mr. B needs to apply to the company with:
* Death certificate of Mr. A
* Indemnity bond or affidavit (if required)
* Probate or succession certificate (if applicable)
* Nomination proof (if nominee registered)
* The company records the name of Mr. B in the **Register of Members** without requiring a transfer deed.
* **No stamp duty is applicable on transmission** because it’s not a transfer.
---
### 3. **Transfer of Shares from Legal Heir to Third Party**
* If shares are to be transferred from Mr. B (legal heir) to Mr. C (Mr. B’s son), it is a **normal transfer**.
* This requires:
* Execution of a **transfer deed (Form SH-4)** by Mr. B (transferor) and Mr. C (transferee).
* Payment of **stamp duty** on the transfer deed as per applicable Stamp Act.
* Submission of transfer deed to the company.
* Even if Mr. B has no objection and gives affidavit, **stamp duty is mandatory on transfer**, because it’s a voluntary transfer.
---
### 4. **Transfer Directly from Mr. A (deceased) to Mr. C**
* If shares are directly transferred from deceased Mr. A to Mr. C (bypassing Mr. B), this is **not legally valid as a transfer**, because Mr. A cannot transfer shares after death.
* Transmission must first happen in favour of legal heir or nominee.
* Any transfer before transmission is invalid.
---
### 5. **Nomination vs. Will**
* **Nomination**: The company recognizes the nominee only for receiving dividends and shares in case of death, but the nominee **does not become absolute owner** automatically.
* The nominee **holds shares in trust** until legal heir(s) prove their claim.
* **Will**: Shareholder can specify in his will the person(s) to whom shares pass.
---
### 6. **Summary Table**
| Situation | Stamp Duty Applicable? | Formalities |
| ------------------------------------------------------------------- | ---------------------- | ----------------------------------------------------- |
| Transmission from deceased (Mr. A) to legal heir (Mr. B) or nominee | No | Application with death certificate & docs |
| Transfer from legal heir (Mr. B) to third party (Mr. C) | Yes | Transfer deed (Form SH-4), stamp duty, board approval |
| Direct transfer from deceased (Mr. A) to Mr. C | Not valid | Transmission must happen first |
---
### **Conclusion:**
* **No stamp duty on transmission**, since it’s by operation of law.
* **Stamp duty applies on transfer** to any third party after transmission.
* Shares cannot be transferred directly from deceased shareholder to any other person.
---
If you want, I can help draft the **transmission application format** or **transfer deed (SH-4)** template for your use. Would you like that?
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