Transmission of Shares on Death — Documents

Overview

Section 56 of the Companies Act, 2013 deals with both transfer and transmission, but the proviso to sub-section (1) carves transmission out of the transfer machinery: the requirement of a stamped, executed instrument of transfer does not apply where the right to the securities passes by operation of law. Transmission covers three events — the death of the holder, their adjudication as insolvent, or a declaration of unsound mind by a competent court.

The legal character of transmission matters because it answers the three questions families always ask. Do we need a transfer deed? No — a written intimation with supporting documents is enough. Do we pay stamp duty? No — there is no instrument to stamp. Does the company have a choice? The board still registers the transmission by resolution, and a private company can refuse under Section 58, but refusal of a genuine succession claim is rare and appealable.

What the company does need is proof of title — evidence that the claimant is the person entitled to the shares. The form of that proof depends on the situation: a nomination on record, a will, or intestacy. Each has its own document, its own issuing authority, and its own timeline, and choosing the wrong one is the single biggest cause of delay.

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Is transmission the right route for your situation?

Transmission is the correct route when:

• A shareholder has died, whether or not they left a will — the shares pass to the nominee, the executor/beneficiary, or the legal heirs.
• A shareholder has been adjudicated insolvent — the official assignee or receiver claims the shares.
• A shareholder has been declared of unsound mind by a competent court — the guardian claims on their behalf.
• Shares are held jointly and one holder dies — the survivor takes the shares; the deceased holder's legal heirs have no claim on jointly held shares.

You need a different route when:

• The shareholder is alive and selling or gifting — that is a transfer on Form SH-4 with 0.25% stamp duty. See our transfer of shares page.
• You are issuing new shares to someone — that is an allotment, not transmission.
• The dispute is about who among several claimants is entitled — the company cannot decide succession disputes; that is for the civil court, and the company will wait for the court's determination.

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What must be decided before approaching the company

Check for a nomination first. If the deceased filed Form SH-13 nominating someone under Section 72, the transmission goes to the nominee on the strength of the death certificate and the nomination record — no succession certificate needed. This is the fastest route by far, and the first thing to check.

Identify the succession route. No nomination and a valid will → probate (or letters of administration). No nomination and no will → succession certificate from a civil court. Small holding and the company's articles allow it → legal heir certificate with affidavit, indemnity and co-heir NOCs. Picking the route determines which court or authority you approach and how long it takes.

Get the family aligned. Where there are multiple legal heirs, the company will want either a single claimant with no-objection letters or relinquishment deeds from the others, or transmission to all heirs jointly. Sorting this out before approaching the company avoids the board parking the file.

Locate the share certificate. The original certificate (or allotment letter) travels with the transmission intimation. If it is lost, the duplicate-certificate procedure has to run first.

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Succession certificate vs legal heir certificate vs probate — the distinction that decides your timeline

This is the section families need most, because the three documents are constantly confused and choosing wrong costs months.

Succession certificate. Issued by a civil court under the Indian Succession Act, 1925. It certifies the holder's right to collect the deceased's movable property — and shares are movable property. It is the standard proof of title where the deceased died intestate (without a will) and there is no nomination. Its great virtue for the company: once granted, it provides full indemnity to the company for registering the transmission. That is why companies ask for it — it protects them. Obtaining one means a court petition, publication, and typically several months.

Legal heir certificate. Issued by revenue authorities — usually the tehsildar — on application by the family. It lists who the legal heirs of the deceased are. It is not a court order, it does not confer title to any specific property, and it does not indemnify the company the way a succession certificate does. Its evidentiary value is weaker. Companies accept it only for small holdings, at their discretion under their articles, and usually only with an affidavit, an indemnity bond, and no-objection letters from the other heirs. Do not assume your company will accept it — ask first.

Probate. Where the deceased left a will, the answer is probate — a certified copy of the will issued under the seal of a court of competent jurisdiction, confirming the will's validity and the executor's authority. With a probated will, no succession certificate is required at all. If the will names no executor, or the executor cannot act, the court issues letters of administration instead, which serve the same purpose.

The rule of thumb: will → probate; no will → succession certificate; small holding and the company agrees → legal heir certificate plus indemnities. And nomination beats all three — a Section 72 nominee needs none of them.

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Nomination under Section 72 — the shortcut families forget to use

Section 72 of the Companies Act, 2013 allows every holder of securities to nominate a person in Form SH-13, filed with the company, to whom the securities vest on the holder's death. The nominee can then either register the shares in their own name or transfer them as the deceased could have.

Why it matters: where a valid nomination exists, the company is not required to identify the legal heirs at all — it registers the shares in the nominee's name on the death certificate, the nomination record, the nominee's KYC and a transmission request. No court, no succession certificate, no waiting.

The limitation to understand honestly: nomination does not decide ultimate ownership. The Bombay High Court in Shakti Yezdani v. Jayanand Salgaonkar (2016) held that nomination neither gives the nominee an absolute right nor overrides the law of testamentary or intestate succession — the nominee holds as a trustee until the legal heirs establish their succession rights. In practice, though, companies transmit to the nominee and leave any family dispute to the courts.

The practical lesson: if you hold shares in a private company, file your SH-13 nomination today. It is a one-page form that saves your family months of court procedure. And if you are advising a family after a death, check the company's nomination register before starting any succession application.

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Advantages of handling transmission promptly

The shares keep working

Dividends declared after the death are payable to the member on record. Until transmission is registered, dividends, bonus issues and rights entitlements sit in the deceased's name — recoverable, but tangled. Prompt transmission keeps the economic benefits flowing to the right person.

Voting rights are restored

A deceased member cannot vote, appoint proxies, or be counted for quorum. In a closely held private company where every vote matters, an untransmitted holding can deadlock decisions. Transmission restores the full membership rights to a living holder.

It unblocks the company's own compliance

The register of members must reflect reality. Transfers, further issues, buybacks and even the annual return all assume a current, accurate member list. A long-dead member sitting in the register is a diligence red flag in every future transaction.

Nomination makes it nearly free

With an SH-13 on record, transmission costs the family almost nothing — a letter, a death certificate, KYC. Compare that with a succession certificate petition: court fees, lawyer's fees, and months of waiting. The cheapest succession plan is a nomination filed during the shareholder's lifetime.

No stamp duty, no consideration

Because transmission is by operation of law, there is no deed to stamp and no price to pay. The only costs are the court's fees for the succession documents and professional fees — the transmission itself is duty-free.

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Documents required

Always required:

• Certified copy of the death certificate
• Original share certificate(s) or letter of allotment
• Written transmission request signed by the claimant
• KYC of the claimant (PAN, address proof, specimen signature)

Route A — nomination on record (Section 72):

• Nomination details / Form SH-13 acknowledgement
• Death certificate and KYC as above
• That is all — the company registers the nominee without identifying legal heirs

Route B — will exists:

• Probated will (certified copy under court seal), or letters of administration where applicable
• Death certificate and KYC as above
• No-objection from other beneficiaries, if the company asks

Route C — no will, no nomination:

• Succession certificate from a civil court, or
• Legal heir certificate plus affidavit, indemnity bond and NOC/relinquishment deeds from co-heirs (only for small holdings, and only if the company's articles/policy permit)
• Death certificate and KYC as above

For joint holdings:

• Death certificate of the deceased joint holder; the survivor is registered on that alone — the deceased's legal heirs have no claim on jointly held shares

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Transmission process — step by step

Step 1 — Intimate the company

The claimant writes to the company intimating the death (or insolvency), enclosing the death certificate and stating the claim — as nominee, executor, or legal heir. There is no prescribed statutory form for this intimation; a clear written request with the documents is what the law requires. (Note: Form SH-7 is sometimes mistakenly mentioned here — it is actually the ROC notice for alteration of share capital under Section 64 and has nothing to do with transmission.)

Step 2 — The company checks the nomination register

The first verification is whether a Section 72 nomination exists. If yes, the process jumps to board approval — no succession documents needed.

Step 3 — Claimant establishes title

Without a nomination, the claimant produces the succession proof for their route: probated will, letters of administration, succession certificate, or (for small holdings where permitted) legal heir certificate with affidavit, indemnity and co-heir NOCs. The company verifies the documents and may ask for additional indemnities.

Step 4 — Board approves by resolution

The board (or a duly authorised committee) considers the intimation and, if satisfied, passes a resolution approving the transmission. A private company may refuse under Section 58, but must send a reasoned refusal notice within 30 days.

Step 5 — New certificate and updated register

The company cancels or endorses the original certificate, issues a new certificate in the claimant's name within one month of receiving the intimation, and updates the register of members. The transmitted shares carry any existing lien or unpaid-call liability with them — transmission does not wipe the slate clean.

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How long does it take?

The company-side process is quick: once complete documents are lodged, the board approval and new certificate typically take 2 to 4 weeks, within the statutory one-month window for certificate delivery.

The real timeline is the succession paperwork. A nomination-route transmission can complete in weeks. A succession certificate or probate petition in a civil court commonly takes 3 to 6 months, sometimes longer. Families should start the court process immediately and keep the company informed — most boards will note the pending intimation and act the moment the court document arrives.

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How ComplyKart helps in this entire process

Route mapping. We check the nomination register, read the will (if any), assess the holding size against the company's articles, and tell you the fastest valid route — nomination, probate, succession certificate, or legal-heir-certificate with indemnities.

Succession paperwork. We draft the court petitions for succession certificates and probate, prepare the affidavits, indemnity bonds and co-heir NOCs/relinquishment deeds, and coordinate with counsel for filing.

Company liaison. We prepare the transmission intimation, compile the document set the board will actually ask for, and follow through to the resolution, the new certificate and the updated register of members.

Disputes and refusals. Where co-heirs disagree or the board refuses, we advise on the Section 58 appeal to the NCLT within the limitation window.

What we do not do: we cannot decide who the rightful heir is — that is for the family or the civil court. We cannot get the board to accept a legal heir certificate where the articles require a succession certificate, and we cannot shortcut a court process.

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What happens after transmission is registered

Immediately: the claimant becomes the member — entitled to dividends, voting rights and all membership privileges. The new certificate is issued within one month of the intimation.

Check directorships. If the deceased was also a director, the transmission of shares does not fill the board vacancy — a separate director appointment (DIR-12) is needed. Do not confuse the two.

Update the family's own records. The transmitted shares should now appear in the claimant's own nomination (file a fresh SH-13), will, and tax records. The cost of acquisition for capital-gains purposes is the deceased's cost — keep the original purchase evidence with the transmission file.

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Common mistakes and how to avoid them

Assuming the nominee is the owner. The nominee is a trustee for the legal heirs (Shakti Yezdani). If the family arrangement differs from the nomination, the succession law — not the nomination — decides ultimate ownership. Do not treat the nomination as a will.

Starting with the court before checking the nomination register. Families spend months on a succession certificate petition, then discover an SH-13 was on file all along. Always check with the company first.

Offering a legal heir certificate where it will not be accepted. The legal heir certificate is not a title document. For substantial holdings, companies will insist on a succession certificate or probate. Ask the company what it accepts before you rely on the tehsildar's certificate.

Forgetting joint holdings. Where shares are held jointly, the survivor takes them on the death certificate alone. Legal heirs of the deceased joint holder sometimes file succession petitions for shares they have no claim to.

Letting dividends accumulate in a dead person's name. Unclaimed dividends eventually move toward the Investor Education and Protection Fund. Transmit promptly so entitlements flow to a living member.

Not filing a fresh nomination after transmission. The new holder should immediately file their own SH-13, or the family faces the same succession maze at the next death.

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Transfer vs transmission — the comparison that matters

| | Transfer | Transmission (this page) | |---|---|---| | Trigger | Sale, gift, voluntary dealing | Death, insolvency, unsound mind | | Legal basis | Section 56, Companies Act, 2013 | Section 56 proviso (operation of law) | | Instrument | Form SH-4 mandatory | No statutory form; written intimation | | Stamp duty | 0.25% | None | | Consideration | Usually present | None | | Lodgement deadline | 60 days from execution | No fixed window | | Key document | SH-4 deed | Succession certificate / probate / SH-13 nomination | | Refusal | Section 58 applies | Section 58 applies |

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Sources

This page is built on the Companies Act, 2013 (Sections 56 proviso, 56(4), 58, 72), the Companies (Share Capital and Debentures) Rules, 2014, the Indian Succession Act, 1925 (succession certificates, probate, letters of administration), and the Bombay High Court's decision in Shakti Yezdani v. Jayanand Salgaonkar (2016) on the trustee character of nomination. Procedural practice is drawn from standard secretarial references. Where a claim could not be verified against a primary source, it is marked [NEEDS VERIFICATION].

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