Procedure for Transmission of Shares

Because transmission arises from an event rather than an agreement, its procedure looks quite different from the procedure for transfer, even though both eventually update the same register of members.

Step 1 — Application with proof of the triggering event. The person now entitled to the shares — the legal representative, the Official Assignee, the guardian of a person of unsound mind, or the liquidator of a corporate member, as the case may be — applies to the company for registration of transmission, along with documentary proof of the event and of his own right to the shares. Depending on the event, this proof commonly consists of:

• a death certificate, together with a succession certificate, probate of the will, or letters of administration granted by a competent court, establishing who the deceased's legal representative is;
• the order of adjudication in insolvency, establishing that the Official Assignee or Receiver now holds the insolvent's estate;
• the order of the court declaring a member of unsound mind, along with proof of the appointment of his committee or guardian; or
• the liquidator's certificate of appointment, where the member was itself a body corporate now in winding up.

Step 2 — No instrument of transfer is needed. Unlike an ordinary transfer, transmission does not require the Form SH-4 instrument of transfer, because there is no transferor and transferee freely agreeing to a sale — the change of entitlement has already happened by force of law; the company is simply being asked to recognise and record it.

Step 3 — Board's examination and the right of election. The Board examines the documents to confirm the applicant's title, and, once satisfied, generally has two options available to the legal representative under the company's articles — this flexibility mirrors the standard regulations found in Table F of the Act's Schedule I: the legal representative may elect to be registered himself as the holder of the shares, or he may elect to have the shares transferred to some other named person, without first being registered in his own name at all. If he chooses the second option, he must still execute a transfer in the ordinary way on behalf of the deceased or insolvent member, but no separate transfer needs to be made by him personally after being registered. …