16 October 2010
What are requisite for transmission of shares, like -application by recepient; -Succession certificate, probate or LA in case of Will or none; -Copy of will Pl quote relevant section etc
17 October 2010
Second proviso to section 108(1) of the Companies Act,1956 and Articles 25 to 28 of Table A generally applies for transmission of shares. However, the provisions in company's Articles of Association also may be looked into.
17 October 2010
Request u be specific to query. In my case, Will is fabricated. No probate has been sought. Majority has allowed transmission, without my application.
19 October 2010
Thanks Chackrapani & Ankur. Details are: Art 1 of AOA of the company provides that Regulations in Table A in Sch I shall apply. Art 6 provides that the shares shall be under the control of the BODs. There is no other specific provision in AOA, for the transmission of shares. 2. R 25 provides that legal rep of the sole deceased holder (D) shall be the only persons recognised by the company. Under R 26, he can get himself registered as holder of the share of the deceased or transfer them (Sn 109). For this purpose, he has to elect to be registered and execute a transfer instrument. (R 27) 3. Section 108 requires that transfer not to be registered except on production of instrument of transfer. However, under 2nd proviso to this section, company may register a legal heir or legal rep without the transfer instrument. Under sn 110 (1) an application for the registration of a transfer of the shares may be made either by the transferor or by the transferee. 4. Secretarial practice notes below sn 109(Ramaiah) lays down obtaining of i. succession certificate ot probate or LA and in case of small holdings, indemnity bond and affidavit on non-judicial stamp paper; ii. certified copy of death certificate; iii. specimen signature of the successors to the shares. 5. K had 502, S 2,134 & D 2,364 (Total 5,000) shares in a company. D was MD & S JMD. D died on 1.2.2000. K’s brother, S, fabricated (in mid 2001) a Will (execution date 11.8.1999) of their father(D), in which S is executor & showed legacy of 300 shares to K(rest to S’s family). Balance sheet used to be signed by MD & JMD. For FY 2000-01, it was signed on 14.11.2000, by S as JMD & his wife, also a Director. (For FY 2001-02, he signed as MD) Dividend was credited to K on 6.12.2000 on 502 shares and 9.11.01 on 802 shares. K knew about both in 2002, but cheque was received on 19.3.2010. 6. K was also a Director(Thus, total 3 directors), meeting fee, @ Rs 100 per meeting, was being credited in her a/c. She has neither received any notice of meeting of BOD or AGM. S was getting her signature in lieu of attending BOD. Although Art 28 provides for payment of TA,etc, for attending meeting of BOD, but none was actually paid. 7. There is no probate or succession certificate. K had no knowledge of the Will and has not applied for registration of shares. 8. D’s return for FY 99-00 was filed by D’ wife, as legal heir, on 16.1.2002, in which dividend on 2,364 shares was shown. 9. Query: 1) What may have been done by S in BOD? 2) Does transmission of shares by BOD has to be approved by AGM? 3) For challenging the Will in civil court, what points could be taken from these facts and above provisions of company law?
20 October 2010
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)}
20 October 2010
Thanks In the above case there was neither succession certificate nor probate nor even specific signature of the successor. Could the BOD have approved the transmission? Action of the BOD was not approved by AGM. Is the action of BOD illegal? Where it can be challanged?
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