Distinguish between transfer and transmission of shares.

Question

Accepted Answer

Transfer and transmission of shares both result in a change of the name recorded against a shareholding in the company's register of members, and this shared outcome can make the two concepts blur together in a student's mind unless the underlying differences are kept clearly in view.

| Basis | Transfer of Shares | Transmission of Shares |
|---|---|---|
| Nature of the act | Voluntary act of the shareholder | Happens by operation of law |
| Trigger | A decision to sell/gift shares | An event: death, insolvency, insanity, or winding up |
| Instrument required | Instrument of transfer (Form SH-4), duly stamped | No instrument of transfer; proof of the event is submitted instead |
| Consideration | Usually present | Absent |
| Stamp duty | Payable | Not payable |
| Lodging time limit | 60 days from execution (Section 56(1)) | No fixed statutory deadline |
| Who applies | The transferor/transferee jointly | The legal representative, Official Assignee, guardian, or liquidator |
| Company's power to refuse | Available under Section 58 | Available under Section 58, on the same footing | …

Point of difference	Share Transfer	Share Transmission
Meaning	Voluntary passing of shares from one person (transferor) to another (transferee)	Passing of shares by operation of law on death, insolvency or lunacy of a member
How it arises	By a deliberate act of the parties	Automatically, by law, not by any act of the member
Instrument of transfer	A duly executed instrument of transfer (transfer deed) is required	No transfer deed is required; only evidence like death certificate / court order
Consideration	Normally made for consideration (price)	No consideration is involved
Stamp duty	Stamp duty is payable on the transfer deed	No stamp duty is payable
Parties	Transferor and transferee	Deceased/insolvent member's legal representative or official assignee

Q.Distinguish between transfer and transmission of shares.

Concept understanding — Distinction Between Transfer and Transmission, and Nomination of Shares

Basis	Transfer of Shares	Transmission of Shares
Nature of the act	Voluntary act of the shareholder	Happens by operation of law
Trigger	A decision to sell/gift shares	An event: death, insolvency, insanity, or winding up
Instrument required	Instrument of transfer (Form SH-4), duly stamped	No instrument of transfer; proof of the event is submitted instead
Consideration	Usually present	Absent
Stamp duty	Payable	Not payable
Lodging time limit	60 days from execution (Section 56(1))	No fixed statutory deadline
Who applies	The transferor/transferee jointly	The legal representative, Official Assignee, guardian, or liquidator
Company's power to refuse	Available under Section 58	Available under Section 58, on the same footing

Q.Distinguish between transfer and transmission of shares.

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