Transmission of shares

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Viral Mehta (Querist)
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18 October 2012 Dear All,

Please consider it as an urgent.

I received an Application for Transmission of Shares from the Grandsons of the deceased Shareholders to transmit the shares in their name in ration of 50:50.

Now, Shares are held physical mode only. So, I have to split the Existing Share Certificate into Two Certificates in the name of Applicants.

Hence my question is unlike the procedure for transfer where we first split and issue new certificates and then endorse it to new persons, can't we directly issue the new share certificates in the name of the Applicants?

Please guide as soon as possible.

Thanks in Anticipation,

Viral

Ajay Mishra

Ajay Mishra (Expert)
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18 October 2012 Hi

First of all you split the old share certificate in 2 certificate in the name of original member and then issue such certificate to both grandsons.

For Example:

Mr. A is the original holder of 1000 shares with share certificate number 14 and Folio number 7, having distinctive number from 20001 to 30000.

Now split this Certificate No. 14 in two certificates of 5000 shares each:

Certificate Number 22, Folio No. 7 and distinctive number from 20001 to 25000 in the name of Mr. A;and

Certificate Number 23 in the name of A Folio No. 7 and distinctive number from 25001 to 30000;.

Transfer Certificate number 22 to Grandson 1 and Certificate number 23 to Grandson 2 after making entry therein of grandsons.

Ajay Mishra

Ajay Mishra (Expert)
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18 October 2012 Requirement of documents/evidence for transmission of shares

Where title of 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 evidence is sufficient:-
1. Certified copy of death certificate
2. Succession certificate
3. Probate
4. Specimen signature of the successor.
However the requirement of these certificate is not essential and depends on various circumstances of the case. Where the succession certificate has been granted in respect of shares, the company can not insist on the production of probate or letter of administration, the certificate affords full indemnity to company.{Thenappa Chettiar v. Indian Overseas Bank Ltd.(1943)}

Viral Mehta

Viral Mehta (Querist)
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18 October 2012 Hello,

Firstly, thanks very much for your reply!

My confusion is:

1. As We have to issue new Share Certificates why can't we issue them in the name of new shareholders? Will we be legally incorrect if we do so?

2. Unlike Share Transfer, here it is a case of deceased shareholder, so, wouldn't it be wise to issue new certificates to new shareholders in CURRENT DATE than to first issue new certificates in the name of a DECEASED?? and then giving effect of Transfer?

Thanks in advance.

Ajay Mishra

Ajay Mishra (Expert)
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18 October 2012 Because the law have not given permit to issue issue certificate as you want.

The share certificate will always be issued on the date of Board meeting in which transmission is approved or thereafter.

Viral Mehta

Viral Mehta (Querist)
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18 October 2012 Dear Sir,

Can you suggest the source where it is so stated/not permitted?

Also, I am duly getting the Approval of Board for the same and then issuing new share certificates, then also not possible?

Some different point, is it ok if we issue new share certificate in name of deceased where we have the proof of it??

Ajay Mishra

Ajay Mishra (Expert)
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18 October 2012 Hi

It is a general practice followed by company and RTA that unless the whole shares are not transferred to another person no share certificate will be issued with same folio number and distinctive number to any other person.

In case of split, the new certificate will always be issued in old shareholder name.

If you belief on this then its ok otherwise it will depend on you to consider it or not.

Regards

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Viral Mehta

Viral Mehta (Querist)
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18 October 2012 Ok. Thank you very much for spending your valuable time for resolving my query. There is no other intention of asking you a source of it except to enrich myself about the due procedure.

Thanks with regards,

Viral

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