Q.What do you mean by 'membership by transmission of shares'? How is it different from transfer of shares?

Transmission looks similar to transfer in outcome — a new name enters the register — but the underlying cause and process are quite different.

Membership by transmission of shares refers to a person acquiring membership of a company not by any voluntary act of buying or selling shares, but by operation of law, typically following the death, insolvency, or lunacy of an existing member. On the death of a member, for instance, the shares vest by law in his legal representative (executor or administrator, or the heirs under succession law); on insolvency, they vest in the Official Assignee or Official Receiver. The person entitled produces documentary proof of title — a succession certificate, probate, letters of administration, or an insolvency order — and the company, under Section 56, registers that person as the new member without requiring any instrument of transfer at all.

Transfer of shares, by contrast, is a voluntary transaction between two living, competent parties who choose to buy and sell (or gift) shares. It requires a duly executed and stamped instrument of transfer in the prescribed form, delivered to the company along with the share certificate, and the transfer takes effect only once the company registers it. …

Students frequently say transmission 'also needs an instrument of transfer', which is incorrect — transmission is proved by succession documents, not a transfer deed — and for …