Difference between Transfer of Shares and Transmission of Shares

Transfer of Shares; Transmission of Shares

(1) Transfer of Shares:

  • Meaning: Transfer means transferring the shares on the name of some other person on a voluntary basis.

  • Initiative: The transfer-or and transferee takes initiative.

  • Nature of Action:It is a deliberate action taken by a share holder.

  • Parties: There are two parties i.e. transfer-or and transferee to the transfer of shares.

  • Documents Required: An instrument of transfer has to be duly executed by the transfer-or and transferee.

  • Stamp Duty: It is payable on the market value of shares.

  • Right of Refuse: The directors of the company can refuse transfer of shares on certain grounds.

  • Consideration: There must be an adequate consideration for the transfer of shares, unless they are transferred by way of gift.

(2) Transmission of Shares:

  • Meaning: Transmission of shares means the passing of property or title in shares by the operation of law from a member to his legal representative on the happening of a certain event like death, insolvency or lunacy.

  • Initiative: The legal heir of the deceased share holder takes the initiative.

  • Nature of Action: It is not deliberate action of a shareholder, but the result of operation of law, after he dies or becomes insane or bankrupt.

  • Parties: The legal heir of the deceased share holder is involved.

  • Documents Required: Certain documents like court order of insolvency, death certificate are required for transmission of shares.

  • Stamp Duty: No stamp duty is payable for transmission of shares.

  • Right of Refuse: Transmission of shares can't be refused, it is under operation of law.

  • Consideration: The question of consideration does not arise in the case of transmission of shares, as it is due to the operation of law.


Guest Author: Pooja19 Oct 2015

Thank you. Useful information.

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