{"id":129,"date":"2025-04-02T10:24:23","date_gmt":"2025-04-02T10:24:23","guid":{"rendered":"https:\/\/investorlink.in\/blog\/?p=129"},"modified":"2025-04-02T10:24:25","modified_gmt":"2025-04-02T10:24:25","slug":"transmission-of-shares-vs-transfer-of-shares-know-the-difference","status":"publish","type":"post","link":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/","title":{"rendered":"Transmission of Shares Vs. Transfer of Shares: Know the Difference"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<p>Ownership rights in a company are conveyed through shares. Accordingly, the holders of shares are entitled to certain rights, such as voting in company matters and getting the dividends. However, for reasons such as sale, inheritance, etc., a change in ownership may occur. This change in ownership can occur in two ways: transfer of shares and transmission of shares. While a transfer of shares and a transmission of shares are aimed at effecting a change of ownership, the two processes are drastically different in their nature and legal requirements.<\/p>\n\n\n\n<p>In this article, we will discuss the transfer and transmission of shares thoroughly and also contrast the same under the Indian Companies Act, 2013.&nbsp;&nbsp; &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is Transfer of Shares?<\/h2>\n\n\n\n<p>Transfer of shares refers to a voluntary process whereby the existing shareholder (called the transferor) transfers their shares to another person (called the transferee). Usually, this is done by means of a transfer deed and needs the approval of the company.<\/p>\n\n\n\n<p><strong>Key Features:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is a voluntary act of a shareholder.<\/li>\n\n\n\n<li>It occurs via sale or donation.<\/li>\n\n\n\n<li>It requires the use of a transfer deed (Form SH-4).<\/li>\n\n\n\n<li>Stamp duty is applicable.<\/li>\n\n\n\n<li>After completion of the process, the new shareholder becomes the legal owner of the shares.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Illustration:<\/strong><\/p>\n\n\n\n<p>Raj holds 100 shares of ABC Ltd. and proceeds to sell 50 shares to his friend Rahul. They execute a share transfer deed, which is filed with the company for processing, and Rahul is then recognized as the new shareholder for 50 shares.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Transmission of Shares?<\/h2>\n\n\n\n<p>Transmission of shares occurs when one person&#8217;s shareholding is passed on to the other due to the death, insolvency, or mental incapacity of the shareholder. Unlike the transfer process, the transmission process is not a voluntary action; it is an act performed in order to comply with the law. &nbsp;<\/p>\n\n\n\n<p><strong>Key Features:<\/strong><\/p>\n\n\n\n<p>\u2022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Occurs in case of death, insolvency, or incapacity<\/p>\n\n\n\n<p>\u2022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Automatic by law<\/p>\n\n\n\n<p>\u2022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No need for a transfer deed<\/p>\n\n\n\n<p>\u2022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No stamp duty is applicable<\/p>\n\n\n\n<p>\u2022&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal documents have to be presented to the company, e.g. death certificate, probate, or succession certificate.<\/p>\n\n\n\n<p><strong>Example:<\/strong><\/p>\n\n\n\n<p>If Ravi passes away, having held 500 shares of XYZ Ltd., his shares will be transmitted to his legal heir, such as a son or a wife, upon completion of all the formalities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Differences Between Transfer and Transmission of Shares<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Feature<\/strong><\/td><td><strong>Transfer of Shares<\/strong><\/td><td><strong>Transmission of Shares<\/strong><\/td><\/tr><tr><td><strong>Nature<\/strong><\/td><td>Voluntary<\/td><td>Involuntary (Legal Requirement)<\/td><\/tr><tr><td><strong>Cause<\/strong><\/td><td>Sale, Gift, or Agreement between two parties<\/td><td>Death, Insolvency, or Incapacity of Shareholder<\/td><\/tr><tr><td><strong>Initiator<\/strong><\/td><td>Transferor (Existing Shareholder)<\/td><td>Legal Representative, Heir, or Official Receiver<\/td><\/tr><tr><td><strong>Transfer Deed<\/strong><\/td><td>Required (Form SH-4)<\/td><td>Not Required<\/td><\/tr><tr><td><strong>Stamp Duty<\/strong><\/td><td>Applicable<\/td><td>Not Applicable<\/td><\/tr><tr><td><strong>Consideration (Payment)<\/strong><\/td><td>Required (In case of sale)<\/td><td>Not Required<\/td><\/tr><tr><td><strong>Liability<\/strong><\/td><td>Transferor\u2019s liability ends<\/td><td>Legal heir continues the liability<\/td><\/tr><tr><td><strong>Approval Required<\/strong><\/td><td>By Company\u2019s Board<\/td><td>Company verifies documents<\/td><\/tr><tr><td><strong>Time Taken<\/strong><\/td><td>Depends on company processing time<\/td><td>Usually faster than share transfer<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Process of Transfer of Shares<\/h2>\n\n\n\n<p>The share transfer process involves the following steps:<\/p>\n\n\n\n<p><strong>Execution of Transfer Deed<\/strong>: The share transfer deed (Form SH-4) is signed by the transferor and transferee, stating the number of shares being transferred.<\/p>\n\n\n\n<p><strong>Stamp Duty Payment<\/strong>: The deed is stamped as per the Indian Stamp Act.<\/p>\n\n\n\n<p><strong>Submission to Company<\/strong>: The transfer deed and share certificate are sent to the company.<\/p>\n\n\n\n<p><strong>Approval by Board<\/strong>: The board considers the matter and grants approval for transfer.<\/p>\n\n\n\n<p><strong>Issuance of New Certificate<\/strong>: Once approved, the new share certificate is issued in the name of the transferee within one month.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Process of Transmission of Shares<\/h2>\n\n\n\n<p>The following are the steps involved in the share transmission process in India:<\/p>\n\n\n\n<p><strong>Notification to Company<\/strong>: The legal heir or representative informs the company of the death or insolvency of the shareholder.<\/p>\n\n\n\n<p><strong>Submission of Documents:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Death certificate (if the shareholder is deceased)<\/li>\n\n\n\n<li>Succession certificate\/Will\/Probate (if any)<\/li>\n\n\n\n<li>Self-attested copy of the PAN card of the successor<\/li>\n\n\n\n<li>Specimen signature of the successor(s)<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Verification by Company<\/strong>: The documents submitted to the company are checked.&nbsp;<\/p>\n\n\n\n<p><strong>Approval and Transmission<\/strong>: If all documents are found valid for transmission, the company will record the transmission in its books and issue fresh share certificates.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Legal provisions as per Companies Act, 2013<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Transfer of Shares (Section 56 of Companies Act, 2013)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The transfer must be executed by filling out Form SH-4.<\/li>\n\n\n\n<li>The declaration includes the name, address and occupation of the transferee.<\/li>\n\n\n\n<li>It is required to submit the transferred deed within 60 days from the date of execution.<\/li>\n\n\n\n<li>In the case of partially paid shares, the company should inform the transferee to provide consent in 2 weeks&#8217; time.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Transmission of Shares (Section 56 of Companies Act, 2013)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The legal heir or successor must provide the specified documents.<\/li>\n\n\n\n<li>A transfer deed is not essential.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Time Limit for Delivery of Share Certificates<\/h2>\n\n\n\n<p>In both the transfer and transmission processes, every company must deliver the share certificates within one month from the date it receives the instrument of transfer (in the case of share transfer) or the intimation of transmission (in the case of share transmission).<\/p>\n\n\n\n<p>This means that once the company receives the necessary documents, such as the transfer deed or the legal documents for transmission, it must issue the new share certificates within one month.<\/p>\n\n\n\n<p>However, this time limit may be extended if any provision in law or any order from a court, tribunal, or any other authority has prohibited the company from issuing the shares.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Penalty for Non-Compliance<\/h2>\n\n\n\n<p>If any company is not following the rules:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The company shall be fined between \u20b925,000 and \u20b95,00,000.<\/li>\n\n\n\n<li>The officers concerned may be fined between \u20b910,000 and \u20b91,00,000.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Case Laws<\/h2>\n\n\n\n<p><strong>Prafulla Kumar Rout vs. Orient Engg. Works (P.) Ltd<\/strong><\/p>\n\n\n\n<p>\u2022 The court held that stamps must be affixed to the necessary transfer instrument under Section 108 before delivery. This means that the stamping has to be done before handing over the document.<\/p>\n\n\n\n<p><strong>Mathrubhumi Printing &amp; Publishing Co. Ltd. vs. Vardhaman Publishers Ltd<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Kerala High Court held that a transfer instrument is called unstamped if it is not duly executed<\/li>\n\n\n\n<li>Even if the company personnel cancel the stamps, that does not mean the document is stamped in the legal sense.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Re: Reliance Industries Ltd<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In the instant case, the company did not despatch the transferred shares to the transferee within the two-month schedule under Section 113.<\/li>\n\n\n\n<li>The Board imposed penalties on the company and its share transfer agents.<\/li>\n\n\n\n<li>The court clarifies that the non-delivery of shares is a continuing offence for which no time limitation can be imposed.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>S.M. Hagee Abdul Hye Sahib vs. KNS Hajee Shaik Abdul Kadar Labbai Sahib Co. (P.) Ltd<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This case specifies that the transmission of shares should not be refused on the ground that the successor is engaged in a competing line of business.<\/li>\n\n\n\n<li>However, in such instances, the transfer of shares may be restricted if allowed by the Articles of Association of the Company.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Important Consideration<\/h2>\n\n\n\n<p><strong>Public Company<\/strong>: Shares are transferable unless otherwise restricted by the Article of Association.<\/p>\n\n\n\n<p><strong>Private Company<\/strong>: Share transfer may be restricted and be subject to quotas set and approved by existing shareholders.<\/p>\n\n\n\n<p><strong>Nomination:<\/strong> Shares will be transmitted directly to the nominee if the shareholder has nominated someone.<\/p>\n\n\n\n<p><strong>Joint Holding:<\/strong> In the case of joint shareholding, upon the death of one holder, the shares get transmitted to the surviving shareholder.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">To Wrap Up<\/h2>\n\n\n\n<p>Although transfer and <a href=\"https:\/\/investorlink.in\/transmission-of-shares\" target=\"_blank\" rel=\"noreferrer noopener\">transmission of shares<\/a> mean the same thing as far as ownership is concerned, the process and the reasons behind it differ. Transfer is a voluntary act; it involves payment. Transmission, on the other hand, takes place by operation of law and does not involve consideration. Hence, shareholders and companies need to understand the differences to comply with regulatory laws without incurring liabilities.<\/p>\n\n\n\n<p>These distinctions will assist in the management of share purchases, inheritances, and company records towards the seamless and legal handling of ownership changes.<\/p>\n\n\n\n<p>To get expert assistance in transmission of shares, visit <a href=\"https:\/\/investorlink.in\/\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/investorlink.in\/<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions (FAQs)<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1743587920653\"><strong class=\"schema-faq-question\">What happens when shares are transmitted?<\/strong> <p class=\"schema-faq-answer\">The act of transmission automatically passes shares to a legal heir or representative for the reason of death, insolvency, or mental incapacity of the original shareholder. Transmission does not require payment or a transfer deed but requires submissions of legal documents to the company, such as a death certificate or a succession certificate.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587926253\"><strong class=\"schema-faq-question\">What is the difference between transfer and transmission of shares?<\/strong> <p class=\"schema-faq-answer\">Transfer of shares is a voluntary act wherein an existing shareholder sells or donates shares to another. Transmission takes place when shares are transferred due to the death, insolvency, or mental incapacity of the shareholder. The stamp duty and deed is required in transfer, but in transmission, it is automatic and does not require these formalities.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587932437\"><strong class=\"schema-faq-question\">What involves the transfer of shares?<\/strong> <p class=\"schema-faq-answer\">Transfer of shares is a voluntary act where the shareholder (transferor) sells or gives a share in an issuer to another person (transferee). This requires the signing of a transfer deed, paying stamp duty, and the approval of the company&#8217;s board, then the transferee acts as the new legal owner of the shares.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587939653\"><strong class=\"schema-faq-question\">What happens when shares are transmitted?<\/strong> <p class=\"schema-faq-answer\">Upon the death or insolvency and even on the mental incapacity of the original shareholder, shares are automatically transmitted to a legal heir or an appointed representative. Transmission, as opposed to transfer, does not require any payments or a transfer deed but requires the company to submit legal documents such as a death certificate or succession certificate.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587947187\"><strong class=\"schema-faq-question\">What is the timeframe for share transfer?<\/strong> <p class=\"schema-faq-answer\">Normally, the transfer of shares lasts for a month after the receipt of the transfer deed and other relevant documentation by the company; however, the time may vary according to the company\u2019s processing speed. It is understood that shares must be transferred within one month of the company receiving the transfer deed in the proper form unless any extension is provided for by law.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587953885\"><strong class=\"schema-faq-question\">Can a company refuse the transmission or transfer of shares?<\/strong> <p class=\"schema-faq-answer\">Yes, upon Transmission and Transfer, a company can refuse the whole thing if some condition is to be met. For Transmission of Shares: If any required valid documents such as a succession certificate are not valid or there are disputes regarding the estate of the deceased shareholder, the company may refuse the transmission. For Transfer of Shares, a request can equally be denied if such transfers do not satisfy legal or company-specific requirements such as incomplete or inaccurate documentation, disapproval of requirements in the company&#8217;s Articles of Association, or failure to pay stamp duty. In both situations, the Company Board may refuse to grant transmission or transfer requests if any of these conditions are not fulfilled.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587965069\"><strong class=\"schema-faq-question\">What happens if the company fails to deliver the share certificate within a month?<\/strong> <p class=\"schema-faq-answer\">If the company fails to deliver a share certificate within one month of receiving relevant documentation (both for share transfers and transmissions), penalties will be imposed. The company will be liable for fines ranging from \u20b925,000 to \u20b95,00,000, while officers involved may also be penalized with fines ranging from \u20b910,000 to \u20b91,00,000.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587974437\"><strong class=\"schema-faq-question\">Can a company charge for share transmissions?<\/strong> <p class=\"schema-faq-answer\">The transmission of shares cannot be charged for by a company. This process is involuntary and no consideration (i.e., money or payment) is involved. The company may incur some losses in dealing with the administration; however, these are usually not called charges for transmission. Charges apply only in the transfer process, mainly in terms of stamp duty.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587980325\"><strong class=\"schema-faq-question\">How can shares become owned after the death of a shareholder?<\/strong> <p class=\"schema-faq-answer\">Ownership of shares effectively changes upon the death of the shareholder, the shares passing to his or her legal heir or representative once the necessary documents are submitted (death and succession certificate). The company will update the register of shareholders accordingly.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587986229\"><strong class=\"schema-faq-question\">What happens if the deed of transfer is incomplete?<\/strong> <p class=\"schema-faq-answer\">When the deed of transfer is incomplete or wrongly filled, the company will reject the application for transfer. The transferor\/ transferee needs to fill her details and submit the deed again along with the share certificate and other necessary documents. Only then will the transfer take place.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587991878\"><strong class=\"schema-faq-question\">How does transmission differ from succession?<\/strong> <p class=\"schema-faq-answer\">Transmission is automatic transfer of shares because of events like death, insolvency, or incapacitation without the use of a transfer deed. Succession entails the legal process of inheritance, whereby heirs inherit the deceased&#8217;s shares along with a will or proper documents. Both processes transfer the shares.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1743587997421\"><strong class=\"schema-faq-question\">Can the transfer of shares be done online?<\/strong> <p class=\"schema-faq-answer\">Yes, many companies now allow online share transfer. All it requires is submitting the scanned copies of transfer deed and other supporting documents under the touch of the company&#8217;s online medium. The request is then perused by the company&#8217;s board, and the transfer is electronically processed and confirmed once all is found in order.<\/p> <\/div> <\/div>\n\n\n\n<p><strong>Related Blog: <a href=\"https:\/\/investorlink.in\/blog\/how-to-transfer-shares-after-the-death-of-a-shareholder\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to Transfer Shares After the Death of a Shareholder?<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ownership rights in a company are conveyed through shares. Accordingly, the holders of shares are entitled to certain rights, such as voting in company matters and getting the dividends. However, for reasons such as sale, inheritance, etc., a change in ownership may occur. This change in ownership can occur in two ways: transfer of shares [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":130,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-129","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transmission-of-shares"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Difference Between Transmission of Shares and Share Transfer<\/title>\n<meta name=\"description\" content=\"Discover the key differences between the transfer and transmission of shares. Learn the legal process, requirements, and impact under the Companies Act, 2013.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Difference Between Transmission of Shares and Share Transfer\" \/>\n<meta property=\"og:description\" content=\"Discover the key differences between the transfer and transmission of shares. Learn the legal process, requirements, and impact under the Companies Act, 2013.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/\" \/>\n<meta property=\"og:site_name\" content=\"Investorlink Blog\" \/>\n<meta property=\"article:published_time\" content=\"2025-04-02T10:24:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-02T10:24:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/investorlink.in\/blog\/wp-content\/uploads\/2025\/04\/Transmission-of-Shares-Vs-Transfer-of-Shares.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"846\" \/>\n\t<meta property=\"og:image:height\" content=\"384\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Monisha Chaudhary\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Monisha Chaudhary\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"10 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":[\"WebPage\",\"FAQPage\"],\"@id\":\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/\",\"url\":\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/\",\"name\":\"Difference Between Transmission of Shares and Share Transfer\",\"isPartOf\":{\"@id\":\"https:\/\/investorlink.in\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/investorlink.in\/blog\/wp-content\/uploads\/2025\/04\/Transmission-of-Shares-Vs-Transfer-of-Shares.jpg\",\"datePublished\":\"2025-04-02T10:24:23+00:00\",\"dateModified\":\"2025-04-02T10:24:25+00:00\",\"author\":{\"@id\":\"https:\/\/investorlink.in\/blog\/#\/schema\/person\/bc8908d6d94862ed9e49ebc9965401ed\"},\"description\":\"Discover the key differences between the transfer and transmission of shares. 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Holding a Master's in Fintech from IIM, she specializes in SEBI, RBI, and IRDAI regulations, as well as fintech business &amp; ROS consulting. With her deep expertise in these regulatory frameworks, Monisha has established herself as a trusted authority in the field. Her insightful articles for Investorlink provide valuable guidance and in-depth analysis, earning her a dedicated following among legal professionals, investors, and financial experts.","sameAs":["https:\/\/investorlink.in\/blog"],"url":"https:\/\/investorlink.in\/blog\/author\/monisha\/"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587920653","position":1,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587920653","name":"What happens when shares are transmitted?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"The act of transmission automatically passes shares to a legal heir or representative for the reason of death, insolvency, or mental incapacity of the original shareholder. Transmission does not require payment or a transfer deed but requires submissions of legal documents to the company, such as a death certificate or a succession certificate.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587926253","position":2,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587926253","name":"What is the difference between transfer and transmission of shares?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Transfer of shares is a voluntary act wherein an existing shareholder sells or donates shares to another. Transmission takes place when shares are transferred due to the death, insolvency, or mental incapacity of the shareholder. The stamp duty and deed is required in transfer, but in transmission, it is automatic and does not require these formalities.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587932437","position":3,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587932437","name":"What involves the transfer of shares?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Transfer of shares is a voluntary act where the shareholder (transferor) sells or gives a share in an issuer to another person (transferee). This requires the signing of a transfer deed, paying stamp duty, and the approval of the company's board, then the transferee acts as the new legal owner of the shares.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587939653","position":4,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587939653","name":"What happens when shares are transmitted?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Upon the death or insolvency and even on the mental incapacity of the original shareholder, shares are automatically transmitted to a legal heir or an appointed representative. Transmission, as opposed to transfer, does not require any payments or a transfer deed but requires the company to submit legal documents such as a death certificate or succession certificate.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587947187","position":5,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587947187","name":"What is the timeframe for share transfer?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Normally, the transfer of shares lasts for a month after the receipt of the transfer deed and other relevant documentation by the company; however, the time may vary according to the company\u2019s processing speed. It is understood that shares must be transferred within one month of the company receiving the transfer deed in the proper form unless any extension is provided for by law.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587953885","position":6,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587953885","name":"Can a company refuse the transmission or transfer of shares?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, upon Transmission and Transfer, a company can refuse the whole thing if some condition is to be met. For Transmission of Shares: If any required valid documents such as a succession certificate are not valid or there are disputes regarding the estate of the deceased shareholder, the company may refuse the transmission. For Transfer of Shares, a request can equally be denied if such transfers do not satisfy legal or company-specific requirements such as incomplete or inaccurate documentation, disapproval of requirements in the company's Articles of Association, or failure to pay stamp duty. In both situations, the Company Board may refuse to grant transmission or transfer requests if any of these conditions are not fulfilled.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587965069","position":7,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587965069","name":"What happens if the company fails to deliver the share certificate within a month?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"If the company fails to deliver a share certificate within one month of receiving relevant documentation (both for share transfers and transmissions), penalties will be imposed. The company will be liable for fines ranging from \u20b925,000 to \u20b95,00,000, while officers involved may also be penalized with fines ranging from \u20b910,000 to \u20b91,00,000.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587974437","position":8,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587974437","name":"Can a company charge for share transmissions?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"The transmission of shares cannot be charged for by a company. This process is involuntary and no consideration (i.e., money or payment) is involved. The company may incur some losses in dealing with the administration; however, these are usually not called charges for transmission. Charges apply only in the transfer process, mainly in terms of stamp duty.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587980325","position":9,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587980325","name":"How can shares become owned after the death of a shareholder?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Ownership of shares effectively changes upon the death of the shareholder, the shares passing to his or her legal heir or representative once the necessary documents are submitted (death and succession certificate). The company will update the register of shareholders accordingly.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587986229","position":10,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587986229","name":"What happens if the deed of transfer is incomplete?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"When the deed of transfer is incomplete or wrongly filled, the company will reject the application for transfer. The transferor\/ transferee needs to fill her details and submit the deed again along with the share certificate and other necessary documents. Only then will the transfer take place.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587991878","position":11,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587991878","name":"How does transmission differ from succession?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Transmission is automatic transfer of shares because of events like death, insolvency, or incapacitation without the use of a transfer deed. Succession entails the legal process of inheritance, whereby heirs inherit the deceased's shares along with a will or proper documents. Both processes transfer the shares.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587997421","position":12,"url":"https:\/\/investorlink.in\/blog\/transmission-of-shares-vs-transfer-of-shares-know-the-difference\/#faq-question-1743587997421","name":"Can the transfer of shares be done online?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, many companies now allow online share transfer. All it requires is submitting the scanned copies of transfer deed and other supporting documents under the touch of the company's online medium. The request is then perused by the company's board, and the transfer is electronically processed and confirmed once all is found in order.","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/posts\/129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/comments?post=129"}],"version-history":[{"count":5,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/posts\/129\/revisions"}],"predecessor-version":[{"id":135,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/posts\/129\/revisions\/135"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/media\/130"}],"wp:attachment":[{"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/media?parent=129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/categories?post=129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/investorlink.in\/blog\/wp-json\/wp\/v2\/tags?post=129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}