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Difference between Transfer and Transmission of shares

Difference between transfer and transmission of shares

Transfer of Shares :

The shares of a public company are movable properly. They are transferable in the manner provided by the Articles of the company. An application for the transfer of shares has to be made either by the transferor or by the transferee.

The company shall not register a transfer unless the instrument of transfer is duly stamped and properly executed. When the transfer has been examined and found to be in order. A receipt will be issued to the person lodging it. When the transfer has been approved by the standing transfer committee of the board or passed by the directors in their periodical meeting s, the necessary entries of transfer will be made in the register of members.  

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Transmission of shares:

In the case of the death , insolvency or lunacy of a shareholder, the title or properly in share is transferred to the legal successor of the deceased shareholder by the operation of law.

The process of transfer of shares to legal successor by operation of law is termed as transmission of shares. When the transmission of shares is properly recorded, the legal successor becomes the bonafide owners of the shares. 

Difference between Transfer and transmission of Share

Transfer Transmission
Deliberate act . the transfer of share is voluntary. it is the deliberate act of the shareholder It involves the passing of the title in share by operation of law.
It is a voluntary passing of shares either by sale or gift during the life time of the transferror. In case of transmission of shares, it happens on the death, insolvency or lunacy of a shareholder.
In case of transfer , the title of the shares passes on to the transferee In case of transmission , the title as well as the right to transfer passes on to the executor or nominee of the deceased or the guardian of lunatic.
In case of transfer of shares , a duly stamped and executed instrument signed by both the parties (the transferror and the transferee) is to be given to the company for registration. In case of transmission of shares succession certificate or courts order is to be produced by the legal representative.

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Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.

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