TRANSMISSION OF SHARES

Meaning and Need:                Transmission of share means transfer of property or title in or title in shares by operations of law.  It implies a change in the ownership of shares as a result of succession to the share after the death, insolvency or lunacy of the shareholder.

Action:                          Transmission is the result of operation of law under special circumstances such as death, insolvency or lunacy of shareholder.

Method:                        Transmission of shares takes place only on death, insolvency or lunacy of a shareholder.

Consideration:              In the case of transmission the question of consideration does not arise.

Authorized person:       The transmission of shares is effected by the legal representative of the shareholders.

Stamp Duty:                 In transmission of share, passing of property is without consideration and no stamp duty is required for passing the title to the legal representatives.

Conclusion:                   In case a register share holder dies or becomes bankrupt, his share are transmitted to his legal representative or the official assignee or receiver.  Transmission is the result of operation of law whereas transfer of share is voluntary and deliberate act.