When a shareholder passes away, the legal ownership of their shares must be transferred to their legal heirs, survivors, or designated nominees. In the financial sector, this legal process of transferring ownership due to the death of the primary holder is known as transmission of shares.
It is important to understand the difference between a transfer and a transmission. A transfer is a voluntary sale or gift of shares between living persons. A transmission is an operational process that occurs automatically by law upon the death of a shareholder. This guide explains how to claim shares of a deceased relative and outlines the transmission of shares in India step-by-step.
Scenario 1: Shares Held with a Nominee
If the deceased shareholder registered a nominee for their account or folio, the transmission process is simplified:
- Submit Death Certificate: The nominee must submit an original or notarized copy of the shareholder’s death certificate to the company’s Registrar and Share Transfer Agent (RTA) or Depository Participant (DP).
- Submit Application Form: Fill out the transmission application form (Annexure O or equivalent) along with signature verification details.
- Identity Verification: The nominee must submit self-attested copies of their PAN card and Aadhaar card, along with their Client Master List (CML) to verify their Demat account.
- Execution: Once verified, the RTA/DP will delete the deceased holder’s name and credit the shares to the nominee’s Demat account.
Scenario 2: Shares Held Without a Nominee (No Will)
If there is no registered nominee and the shareholder died without leaving a Will (intestate), the legal heirs must prove their claim. The share transmission documents checklist in this case includes:
- Application Form: Transmission request form signed by all legal heirs.
- Death Certificate: Original or notarized copy of the death certificate.
- Legal Proof of Representation: Depending on the value of the shares, you will need to provide one of the following:
- Succession Certificate: A legal certificate issued by a competent civil court having jurisdiction over the deceased’s assets, specifying the legal heirs and their respective shares in the estate.
- Letter of Administration: Court-appointed administration of the estate.
- Legal Heir Certificate: Accepted by some companies for low-value claims (typically under ₹5 Lakhs) along with indemnity bonds.
- No-Objection Certificates (NOC): If there are multiple legal heirs but the shares are to be transmitted to only one heir, the other heirs must submit signed relinquishment deeds or NOCs.
- Indemnity Bond & Affidavit: Signed by all legal heirs on stamp paper, indemnifying the company against any future disputes.
Common Obstacles in Share Transmission
- Physical Certificate Conversions: Often, the deceased holder owned physical paper shares that were never dematerialised. In this case, the legal heirs must complete the transmission process on physical shares first. The RTA will issue a Letter of Confirmation, which the heirs then submit to their DP to dematerialise the shares into their own names. For steps on this, see our Physical Share Dematerialisation Guide.
- Multiple Joint Holders: If the shares were held jointly (e.g., husband and wife) and one holder dies, the shares do not transmit to children automatically. The surviving joint holder must apply to delete the deceased holder’s name from the folio before any further transfers can happen.
- Transfers to IEPF: If the shares were lying inactive and got transferred to the IEPF before the shareholder passed away, the heirs must complete the transmission paperwork with the company first. Once the company registers the transmission, the heirs can file Form IEPF-5 to claim the shares from the government. See our IEPF Claim Guide for details.
FAQs
Can a nominee sell transmitted shares immediately?
Yes. Once the shares are successfully transmitted and credited to the nominee’s Demat account, the nominee becomes the legal owner and can hold, transfer, or sell the shares on the exchange.
Is stamp duty applicable on share transmission?
No. Unlike a normal share transfer, there is no stamp duty or transfer fee charged for the transmission of shares in India.
What happens if the value of shares is very low?
For shares valued under ₹5 Lakhs (or the specific threshold set by the company), RTAs often permit transmission without a court-issued Succession Certificate. Instead, they accept a Legal Heir Certificate accompanied by an Indemnity Bond, Affidavits, and NOCs from other heirs.
How long does the transmission process take?
RTAs are mandated by SEBI to process transmission requests within 15 days of receiving a complete set of documents. However, if there are discrepancies in signatures or missing documents, it can take several months to resolve.