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The Tax Publishers Companies Act, 2013--Transmission of Shares Transmission of Shares Under the Companies Act, 2013 CS. Poorvi Gattani This article, by learned author is aimed at discussing the procedure of transmission of shares under the Companies Act, including modes thereof as well as the consequences that follow on failure of company to comply with the requirements of relevant provisions of the Companies Act. In fact, the expression 'transmission' means transmission by operation of law and covers those cases where a person or authority acquires interest in shares by operation of law, without any voluntary act. The Author concludes that the claimants themselves shall take this transmission process and have to apply it to the issuer company. 1. Introduction The word 'transmission' means transfer of title by operation of law. It may be by succession. Transmission of shares is a process by operation of law, whereunder the Shares are registered in a Company in the name of deceased person or an insolvent person are registered in the name of his legal heirs by the Company on proof of death or insolvency, as the case may be. Transmission of shares takes place when a registered member dies or is adjudicated insolvent or lunatic a by competent court. Section 56 of the Companies Act, 2013 empowers the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted. For instance, if a person dies without a Will, their heirs are determined by the operation of law. The succession of shares could be regarded as the transmission of shares. 2. Section 56: Transmission of Shares Sub-section (2) of Section 56 of the Companies Act, 2013 provides for the transmission of shares. It states that the company is obliged to transmit the shares by operation of law on receiving an intimation by the claimant. The company shall, under Sub-section (4), deliver all the certificates of the securities to the claimant within 30 days, provided that they are not prohibited by -- SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Companies Act, 2013--Transmission of Shares

Transmission of Shares Under the Companies Act, 2013

CS. Poorvi Gattani

This article, by learned author is aimed at discussing the procedure of transmission of shares under the Companies Act, including modes thereof as well as the consequences that follow on failure of company to comply with the requirements of relevant provisions of the Companies Act. In fact, the expression 'transmission' means transmission by operation of law and covers those cases where a person or authority acquires interest in shares by operation of law, without any voluntary act. The Author concludes that the claimants themselves shall take this transmission process and have to apply it to the issuer company.

1. Introduction

The word 'transmission' means transfer of title by operation of law. It may be by succession.

Transmission of shares is a process by operation of law, whereunder the Shares are registered in a Company in the name of deceased person or an insolvent person are registered in the name of his legal heirs by the Company on proof of death or insolvency, as the case may be. Transmission of shares takes place when a registered member dies or is adjudicated insolvent or lunatic a by competent court. Section 56 of the Companies Act, 2013 empowers the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted.

For instance, if a person dies without a Will, their heirs are determined by the operation of law. The succession of shares could be regarded as the transmission of shares.

2. Section 56: Transmission of Shares

Sub-section (2) of Section 56 of the Companies Act, 2013 provides for the transmission of shares. It states that the company is obliged to transmit the shares by operation of law on receiving an intimation by the claimant.

The company shall, under Sub-section (4), deliver all the certificates of the securities to the claimant within 30 days, provided that they are not prohibited by --