TRANSFER AND TRANSMISSION OF SHARES

TRANSFER AND TRANSMISSION OF SHARES

Section 82 of Companies Act 1956 says that the shares are movable property which can be transferable.

As per sec 108(1) the shares of the company must be  transferred when the instrument of transfer and the share certificate are given to the company duly stamped, dated, signed and executed on behalf of the transferee and transferor along with the name, address and occupation if any of the transferee.

In case the transfer is made to a Company, the instrument of transfer should be enclosed with share certificate, MOA, AOA, board resolution authorizing investment in shares of other companies, authorized signatories’ specimen signatures.

The share transfer can be approved by the share transfer committee formed by the company or it may approved by the Board. In case of listed company there will be a share transfer committee. In transmission the  it should be approved by the Board only.

Stamping of Instrument of Transfer and Share Transfer Stamps

Before registration the share transfer stamp affixed in the share transfer form should be cancelled on the face of the stamp.( For every hundred rupees of value of share, twenty five paise of stamp duty is payable.).  In case of dematerialized transfer this provision does not apply.

In case of number of share transfer stamps to be affixed it can be made in a separate plain paper and attached along with the share transfer form.

If the company receives the share transfer form but it is proved to the directors satisfaction that the instrument of transfer is lost, the board of directors is authorized to register the transfer.

Signature Verification

The signatures of the parties have to be checked with the specimen signatures having in their records of the company. If there is a mismatch it should be informed to them. In such case attestation from the notary may be insisted.   

Board Resolution for Transfer of Shares:

RESOLVED that the Share Transfers detailed below be and is hereby approved .

Transfer no Name of the transferor name of the transferee no of shares transferred  dist nos

----------------------------------------------------------------------------------------------------------------

Resolved further the share certificate be endorsed for share transfer and the necessary entries be made in the Registrar of Members.

The entries may be made in Share transfer register of the company.

Forms Applicable

The instrument of transfer is given in Form 7B or 7BB (if shares are listed in OTC exchange of India) as per Companies (Central Government’s) General Rules and Form 1956

If the company has received application for the transfer of partly paid up shares, the company should send a notice to the transferor and ensure that the remaining money will be given by the transferee.

Form No.7B

[Pursuant to section 108(IA)1]

Date of presentation of the prescribed authority

For the consideration stated below the “Transferor(s)” named do hereby transfer to the “Transferee(s)”named the shares specified below subject to the conditions on which the shares are now held by the transferor(s) and transferee(s) do hereby agree to accept and hold said shares subject to the conditions aforesaid.

FULL NAME OF COMPANY

NAME OF THE RECOGNISED STOCK EXCHANGE WHERE DEALT IN IF ANY

DESCRIPTION OF EQUITY/PREFERENCE SHARES

No in figures

Number in words

Consideration (in figures)

Consideration (in words)_

Distinctive

From

number

To

Corresponding Certificate Nos.

TRANSFEROR(S) [SELLER)] PARTICULARS

Read. Folio No.

Signature(s)

Name (s) in full

.

Signature of Witness

ATTESTATION I, hereby attest the signature of the transferor(s) herein mentioned Signature Name Address/Seal *Please see overleaf instruction

. Name & Address of witness Pin

TRANSFEREE(S) [BUYER(S)] PARTICULARS

Signature(s)

Name (s) in full

.

OCCUPATION

ADDRESS

FATHER’S/HUSBAND’S NAME

Transferee(s) existing Folio, if any, in same Order of Names

Value of stamps affixed

RS.

DATED This ……………. Day Of ……………….. One Thousand Nine Hundred ……………PLACE……………

For office use only Checked by Signatures tallied by Entered in Register of transfer No Approval Date..

Folio Specimen Signature(S) of Transferee(s)

Company Code .

Continuation of front page (Herein enter the Distinctive numbers when the space on the front page is found to be insufficient)

Distinctive	From
number	To
Corresponding Certificate Nos.

INSTRUCTIONS FOR ATTESTATION:

Attestation, where required (thumb impressions, marks, signature difference, etc.) should be done by a Magistrate, Notary Public or Special Executive Magistrate or a similar authority holding a Public Office and authorised to use the Seal of his office or a member of a recognised Stock Exchange through whom the shares are introduced or a manager of the transferor’s bank.

NOTE:

Names must be rubber stamped preferably in a straight line. Chronological order should be maintained. Broker’s Clearing Number should be stated when delivery is given by a Clearing Member Bank.

Name of delivery Broker or Clearing Number	Date	POWER OF ATTORNEY	PROBATE	DEATH CERTIFICATE
		LETTERS OF ADMINISTATION
		Registered with the company No. ………………………………… date …………………………………. ………………………………………………………………………………… (Signature [not initials] of Broker, Bank, Company or Stock Exchange Clearing House}
		LODGED BY…………………………………………………………………….. FULL ADDRESS……………………………………………………………. ………………………………………………………………………………. ……………………………………………………………………………….
		SHARE CERTIFICATES TO BE RETURNED TO (Fill in the name and address to which the certificates are required to be returned) NAME & ADDRESS ……………………………………………………….. ……………………………………………………………………………….. ………………………………………………………………………………..
		SHRE TRANSFER STAMPS

To be filled only if the documents are lodged by a person other than the transferee.

FORM NO. 7BB

OTC Exchange of India

Date of presentation to the prescribed authority

[Pursuant to sub-rule (2A) of rule 5A Companies (Central Government’s) General Rules and Forms, 1956 read with section 108(1A) of the Companies Act, 1956]

COUNTER RECEIPT AND TRANSFER FROM

Scrip details:                                                                                       C.R. No

Scrip Code:                                                                             Scrip Name:

Transaction details:

Transaction id:                                               Date                             Time:

Market Maker Name:                                      Market Marker Code

Quantity:                                             Rate

Value (consideration) (in figures):

            (in words):

Brokerage:                               Stamp Duty:                           Total Value:

Issuing Counter details                                               . Investor’s details:.

Counter Code:                                                             Investor’s Code:

Counter’s Name:                                                         Investor’s Name:

Counter’s Signature:                                            Investor’s signature :

Distinctive Number Range:

Form		To		Quantity

TRANSFER PARTICULARS

For the consideration of Rs                            (Rupees                                              )

the transferor(s) named do hereby agree to transfer to the transferee(s) to be made, the shares specified in this document, subject to the conditions on which the said shares are now held by the transferor(s) and to be held by the transferor(s) and  to be held by trnsferee(s) do hereby agree to accept and hold the said shares subject to the conditions aforesaid:

Transferor(s) (seller)/ Transferee(s) (Buyer) Particulars

Regd. Folio No.                                                          Code No.

Name of the Holder		Address		Signature(s)

Attestation:                                                                            

                                                                                                Signature of witness

                                                                                    Name and address of the witness

Ihereby attest the Signature of

the Transferor(s) hereinmentioned

                                                                                   

                                                                                   

Signature                                                                    

Name and Address/Seal of the Counter                                

 

Power of Attorney/probate/Date Certificate/Letter of Administration registered with the Company No.                                                          . Date.

Signature [(not initials) of Counter/Bank/Company]

Lodged by                                               Share Certificate to be returned to

(fill in the name and address to which the certificate are required to be returned)

*Note :To be filled only if the documents are lodged by a person other than the transferee.

#Counter means and includes Member and Dealers of  QTCEL.

Period of Transfer:

In the case of listed company, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under section108(1A)(a) or within twelve months from the date of such presentation, whichever is later. In any other case, within two months from the date of such presentation.

The signature of the transferee is maintained in the register of members for the companies’ records.

Share Transfer Committee:

Clause 49 of the listing agreement provides "To expedite the process of share transfers, the Board of the company shall delegate the power of share transfer to an officer or a committee or to the registrar and share transfer agents. The delegated authority shall attend to share transfer formalities at least once in a fortnight."

The highlighted words clearly indicate that the committee has to address the share transfer formalities at least every fortnight. But if there are no formalities to be done by virtue of there, being no requests for share transfers, there is no need for such a meeting.

Death of Transferee:

If the demise of the transferee is intimated to the company before the registration of transfer, the company with the consent of the transferor and his legal heirs can transfer the shares to the legal heirs.If not intimated to the company the registration will be made on the demised transferee.

Transmission of Shares:

Section 108 of Companies Act also talks about transmission of shares.

Transmission is a process of operation of law. The share in the name of deceased or insolvent member is transferred in the name of their legal heirs on the proof of death or insolvency adjudicated by the competent court.

The Articles of the Company will have the provisions relating to transmission of shares.

In case of the joint holders the shares are transferred to the surviving holder or holders and in case of single holder transfers to the legal heirs.

Procedures:

After getting intimation about the death or insolvency of a member, the company shall take steps to transfer the shares to the nominee by giving a notice to him. If there is no nomination made the company should enquire whether the deceased has left a will or whether the legal heirs has applied to the court for the succession certificate

In case of an insolvency of a member the official receiver will have himself registered as the holder of the shares

The legal heirs shall give an application along with the following documents

a)      Death certificate

b)      A will left by the deceased

c)      Succession certificate if the deceased has not left the will

d)     Affidavit by the legal heir declaring his right in the shares

e)      Indemnity bond

f)       No objection certificate from the rest of the legal heirs.

All the application should be checked whether all the particulars are duly filed in

The company secretary shall place the application before the board for the approval

After getting approval the share certificates be issued in the new holders name and same shall be entered in the register.

Resolution for Transmission of Shares

"RESOLVED that transmission of………….. equity shares of Rs. 10/- each bearing distinctive numbers from……….to………….be and are hereby allowed in favour of Shri………… and……….. as the legal representatives of the deceased member Shri…………

RESOLVED further that the production of succession certificate, probate or will or any other legal representation in respect thereof be and is hereby dispensed with."

FORMAT OF TRANSMISSION APPLICATION

To,

The Managing Director,

ABC Limited,

India Chamber Building,

1^st Floor, Esplanade,

Chennai – 600 108.

Dear Sir,

I/We,        __________________________________________________                       &

__________________________________________________, (name of the applicant), an

Indian inhabitant / NRI presently residing at ____________________________________

______________________________________________________________________

_____________________________

(address of each applicant) am/are applying for transmission of the shares held in the name of

________________________________________ (name of the deceased) expired on

______________ (date of expiry) at _______________________(place of death). The

deceased was holding ______ equity shares of the following description

Folio No.	Certificate Nos.	Distinctive Nos.	Shares covered in each certificate

I/We am/are the (Nominee / Legal heir(s) / Successors / Executor(s) of the Will OR Administrators of the Estate of the deceased).Our details are as follows*:

Sr. No.	Name & Address Of the Applicant(s)	Age	Relation with the deceased
1.
2.

*The Hon’ble Court has granted me/us Probate of the Will / Letters of Administration / Succession Certificate on the (date of the order).

                        OR

In the absence of probate of the will / letters of administration / succession certificate, I/we are

furnishing indemnity bond for transmission.

Note :- * is not applicable to nominee

My/Our specimen signature(s) is/are as below:

[Signature of the Applicant(s)]

I/We hereby submit the following documents to support my/our claim for transmission of shares held by the deceased:

1. Original Share Certificates for the entire holding.

2. Death certificate of the deceased in original / Attested.

3. Indemnity Bond duly attested on Non-Judicial Stamp Paper (NJS) of Rs.200/-

4. No Objection Certificate from each legal heir.

I/We hereby request you to transmit the shares covered under Folio No.__________________________ standing in the name of the deceased in my/our name and enter my/our name(s) in the Register of Members of the Company.

Date:                                                                                     Signature of the Applicant(s)

                                                                                                     1.

                                                                                                     2.

                                                                                                     3.

Name and address of the witness                                           Signature of the witness

1.                                                                                                  1.

2.                                                                                                  2.

NOTES:

1. The Application should be typed.
2. Shares can be transmitted to the maximum of three legal heirs only.
3. The Applicants should fill this form in the order in which their names should appear in the certificate.
4. The Death Certificate of the deceased should be duly attested either by Notary . or any Gazette Officer.
5. Please annex all the documents as required along with application to avoid delay in transmission process.

FORMAT OF INDEMNITY BOND FOR TRANSMISSION OF SHARES WITHOUT

PRODUCING PROBATE / SUCCESSION CERTIFICATE / LETTERS OF

ADMINISTRATION

(Please type this indemnity bond after carefully reading the notes mentioned below the format)

To,

The Managing Director,

ABC Limited,

India Chamber Building,

1^st Floor, Esplanade,

Chennai – 600 108.

WHEREAS

___________(Number of shares) Equity shares bearing Distinctive numbers from _____________ to ____________ of the face value of Rs.__/- each and on which Rs.____/- per share is paid comprised in the Share Certificate No(s). _________ of ABC Limited having its registered office at India Chamber Building, 1^st Floor, Esplanade, Chennai – 600 108, are standing in the name of Late Shri./Smt. ___________________________ (name of the deceased) in the Register of Members of ABC Limited. The deceased was holding _____ shares of the following description

Folio No.	Certificate Nos.	Distinctive Nos.	Shares covered in each certificate

WHEREAS:

Shri./Smt. _________________________________________ (name of the deceased) expired on ______________(date of death) leaving behind him/her the following heirs :

Sr. No.	Name & Address Of the Applicant(s)	Age	Relation with the deceased
1.
2.

AND WHEREAS:

The above mentioned shares were separate and self acquired property of the deceased. According to the law of Intestate Succession applicable to him/her by which he/she was governed at the time of his/her death, the person(s) mentioned herein above is/are the only heir(s) of the deceased.  He/She/They is/are entitled to inherit solely/jointly the aforesaid shares covered under Folio No. ______ held by the deceased.

NOW THEREFORE:

I/We, ___________________________________________ (name of the applicant(s) aged ___ years, an Indian Inhabitant / NRI presently residing at ___________________________________________ _____________________________________________________________________________ (address of the applicant/s) approach the Company to transmit the shares covered under Folio No.

_______ and bearing Certificate No(s). ___________ held by the deceased in my/our favour and enter my/our name(s) in the Register of Members of the Company without production of Probate of the Will / Letters of Administration or Succession Certificate from the Court of competent jurisdiction. In consideration of the Company having agreed to transmit and register the aforesaid shares in my/our name on my/our executing a bond in favour of the Company.

Upon the Company transmitting and registering the shares held by the deceased, I/We the undersigned applicant(s) hereunder for myself/ourselves, my/our heirs, executors, administrators and assigns do hereby jointly and severally covenant with the Company, its successors and assigns and agree and undertake at all times save, defend and to indemnify and keep indemnified the Company, its successors and assigns its estate and effects, and its directors, manager, secretary and shareholders and their heirs, executors and assigns from and against all actions, suits, proceedings, accounts, claims and demands whatsoever for or on account of the said shares or dividends or any part thereof or otherwise in connection with the same, and from and against all losses, costs, claims, actions, demands, risks, charges, expenses, damages and losses arising in any manner howsoever.

IN WITNESS WHEREOF I/We, the applicant(s) herein has/have signed and set my/our hands on this

____ day of _______ 20....

Name and address of the Applicant(s)                                         Signature of the Applicant(s)

1.                                                                                                   1.

2.                                                                                                   2.

3.                                                                                                   3.

Name and address of Witness                                                      Signature of the Witness

1.

2.

Place:

Date:

FORMAT OF NO OBJECTION CERTIFICATE FROM OTHER LEGAL HEIR(S) FOR

TRANSMISSION OF SHARES IN THE NAME OF THE APPLICANT(S)

(This Declaration is to be executed on Non- Judicial Stamp Paper of Rs.20/- and should be dulyattested by Notary. This Declaration has to be executed by each legal heir separately by providing identification proof)

DECLARATION

I, _____________________________________, son/daughter/spouse of ____________________________ aged ___, an Indian Inhabitant / NRI presently residing at

__________________, do hereby solemnly affirm and declare as under:

1. That _________________________, the deceased, was holding _____ shares in ABC Limited covered under Folio No. _____________ and Share Certificate No(s). ___________, bearing Distinctive Nos. ________ to __________.

2. That ____________________________ (name of the shareholder), the deceased expired on __________.

3. That I am a legal heir of the said deceased. I am the _____________________ (in what relation) of the deceased.

4. I do not desire to make any claim of title of the said securities held by the deceased. I hereby agree to renounce all my rights existing as well as they may accrue to me in future in respect of the aforesaid securities.

5. I declare that I have no objection whatsoever in transmitting the said securities in the name of the applicant, _________________________________.

I am executing this declaration to be submitted to the concerned authorities of the Company.

I hereby state that whatever is stated herein above is true to the best of my knowledge.

Solemnly affirmed at ________)                                

On this ____ day of ______ 20.. )                   (Signature of the Legal heir)

                                                                                        Deponent

                                                                                              Before Me

                                                                                                  Notary

Difference between Transfer and Transmission

Transfer of shares is by the will of the parties and transmission of shares is by operation of law.

S. No	Basis of distinction	Transfer	Transmission
1.	Meaning	Transfer means transferring the shares on the name of some other person on a voluntary basis	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
2.	Initiative	The transferor and transferee takes initiative	The legal heir of the deceased share holder takes the initiative
3.	Nature of Action	It is a deliberate action taken by a share holder	It is not deliberate action of a shareholder, but the result of operation of law, after he dies or becomes insane or bankrupt
4.	Parties	There are two parties i.e. transferor and transferee to the transfer of shares	The legal heir of the deceased share holder is involved
5.	Documents Required	An instrument of transfer has to be duly executed by the transferor and transferee	Certain documents like court order of insolvency, death certificate are required for transmission of shares
6.	Stamp Duty	For Demat shares there is no stamp duty. In case of physical shares, it is payable on the market value of shares	No stamp duty is payable for transmission of shares
7.	Right of Refuse	The directors of the company can refuse transfer of shares on certain grounds, subject to provisions in the articles of association.	Transmission of shares can't be refused, it is under operation of law
8.	Consideration	There must be an adequate consideration for the transfer of shares, unless they are transferred by way of gift	The question of consideration does not arise in the case of transmission of shares, as it is due to the operation of law