Transfer of shares and Transmission of shares
Q.4 (2) Transfer of shares and Transmission of shares
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Answer:
| Points | Transfer of Shares | Transmission of Shares |
|---|---|---|
| Meaning | Voluntary handing over of ownership of shares by a member to another person. | Passing of ownership of shares by operation of law, on death, insolvency or lunacy of a member. |
| Cause | Deliberate act of the parties. | Death, insolvency or insanity of the member. |
| Consideration | Usually for consideration (sale price). | No consideration is involved. |
| Instrument of transfer | A proper instrument of transfer (Form SH-4) is required. | No transfer deed is needed; evidence such as death certificate, succession certificate or probate is required. |
| Stamp duty | Stamp duty is payable. | No stamp duty is payable. |
| Initiation | Initiated by transferor and transferee. | Initiated by the legal heir, nominee or official receiver. |
| Liability | Transferor’s liability ends on registration (subject to rules on partly paid shares). | Original liability on the shares continues and passes to the legal representative. |
Doubtly AI
· 28 Oct 2026
AI-verified · Oct 2026
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