Individual shareholder dies

Its a Public Ltd Co which is a 50:50 JV between two companies. In order to have min 7 members, one of the company has appointed 5 individual as members, giving them a nominal amount of shares, which is registered in their name. One of the individual shareholder dies, what shall the company do? Will the provisions of transmission follow or the shares will vest in the company who appointed these individuals as shareholders? Please cite relevant provisions.
Replies (10)
In case of death of a registered shareholder, shares can be transmitted to legal representative of a deceased shareholder.For statutory provisions related to Transmission of share one should refer the following sources:

1. Section 56 of Companies Act, 2013

2. Provisions given in model articles of association given in Table ‘F’ of Schedule-I.

So the shares will not be transferred to the beneficial holder?

If the legal representative does not makes an application for transmission within the time limit prescribed under the provisions then the company shall have lien over such shares.

can you justify your ans citing relevant provisions or case laws?

refer section 56(1) read with section 56(5).

If a holder of share dies, then the beneficial owner shall receive the share. Such beneficial owner shall file declaration under Section 89 about change in holder of such share.

Such shares can not go to legal representative/heir of deceased person because the deceased person was not having a beneficial interest in such shares. I hope this clarifies.

Sir, could you please cite me the provision in support of the above statement. 

The Companies Act, 2013 does not have any provision clarifing this point. You need to look if there is any case law. I will let you know if I find any.

Thank you so much but Sir could you tell me on what basis did you form this opinion?

Because the holder of shares does not have beneficial ownership of shares. This is the basic reason that shares should not go to legal heir of the holder.

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