{"id":45368,"date":"2022-07-14T18:22:16","date_gmt":"2022-07-14T12:52:16","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=45368"},"modified":"2022-07-14T18:22:18","modified_gmt":"2022-07-14T12:52:18","slug":"difference-between-transfer-and-transmission-of-shares","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/difference-between-transfer-and-transmission-of-shares\/","title":{"rendered":"Difference Between Transfer and Transmission of Shares"},"content":{"rendered":"\n

A transfer is known as an act of movement of an asset, and for shares, this movement is voluntary or operational by law. When the movement of shares is a voluntary act<\/strong>[1]<\/strong><\/a><\/sup> by the holder of shares and takes place by way of contract, then it is called Transfer of Shares. In contrast, when the movement of shares takes place due to operation of law, on the death of the shareholder or if he becomes insolvent or lunatic, then such movement is called Transmission of Shares. It is the most fundamental difference between the Transfer and Transmission of Shares. In this blog, we will find all the differences between them.\u00a0<\/p>\n\n\n\n

Introduction to Transfer and Transmission of Shares<\/h2>\n\n\n\n

The most important feature of shares is that they\nare transferable because it facilitates a company or corporation in acquiring\npermanent capital and liquid investments to the shareholders. The\ntransferability of shares can be seen in two different ways, and they are\ncommonly known as Transfer of Shares and Transmission of Shares. These two\ndiffer from each other in many ways, including their meaning and concept. Transfer\nof shares is an entirely voluntary act of a member, whereas Transmission of\nshares occurs due to the operation of law.<\/p>\n\n\n\n

Transfer of Shares<\/h3>\n\n\n\n

When the transfer of title and ownership of shares\nis done voluntarily or intentionally between the transferor and the transferee\nis called Transfer of Shares, where the transferor is the one who transfers his\nshares and the transferee is the one who receives such transferred shares. The\nshares of a public company are freely transferred unless that company has a\nvalid reason to disallow such transfer. However, shares of the private company\nare not transferable, and a transfer deed is executed for the transfer of\nshares, but there are some exceptions to it.<\/p>\n\n\n\n

Transmission of Shares<\/h3>\n\n\n\n

In the case where the shareholder is dead or has\nbecome lunatic or insolvent, the Transmission of Shares is done by the\noperation of law. In a case where the shareholder is a company that has already\nwound up there, also Transmission of shares takes place. There is no use for\nexecution of the transfer deed, and the transferee is given the right over\nshares. Transmission is recorded only if the transferee provides proof of\nentitlement to the shares. In case of death of a shareholder, shares are\ntransferred to legal representatives, and in case of insolvency of a\nshareholder, the shares are transferred to an official assignee.<\/p>\n\n\n\n

And thus, the Transfer and Transmission of Shares\ndiffer from each other even in their definition\/introduction also. <\/p>\n\n\n\n

Difference between Transfer and Transmission of\nShares<\/h2>\n\n\n\n

Transfer of Shares and Transmission of Shares\ndiffer in all ways, from meaning and concept to the manner of their execution\nand use of instruments. Transfer of Shares requires instruments of transfer,\nwhereas Transmission of shares requires no instrument.<\/p>\n\n\n\n

We already know that they differ in their meaning\nand in the manners of transfer of shares under each of them. Here, the\nfollowing is the list of differences between the Transfer and Transmission of\nShares:<\/p>\n\n\n\n

Parties<\/h3>\n\n\n\n

In Transfer of Shares, the transfer of title of\nshares is done voluntarily by one party to another, and in Transmission of\nShares, the title of shares is transferred by operation of law. In the Transfer\nof Shares, the transfer is done inter vivos, i.e., between two living beings,\nand they act deliberately, whereas the Transmission of Shares is affected by\ninsolvency, death, inheritance, succession or lunacy of the parties. Transfer\nof Shares is initiated by transferor and transferee, while legal heirs or\nreceivers initiate Transmission of Shares.<\/p>\n\n\n\n

Consideration and Liabilities<\/h3>\n\n\n\n

Adequate consideration must be there in the case of\nTransfer of Shares, whereas in the case of Transmission of Shares, no such\nconsideration is paid.<\/p>\n\n\n\n

The difference between liabilities of Transfer and\nTransmission of Shares is such that in Transfer of Shares, liabilities of the\ntransferor cease the moment the transfer is completed, i.e., the liabilities\nimmediately transfer to the transferor from the transferee after transfer.\nWhile in the case of Transmission of Shares, the original liability of shares\ncontinues to exist.<\/p>\n\n\n\n

Procedure<\/h3>\n\n\n\n

In Transfer of Shares, an application which the\ntransferor and transferee sign is made to the company to transfer, and the\ndirector of that company decides whether to approve such application or not. In\nTransmission of Shares, the person in whose name shares is transferred gives\nproof that he is a legal representative, assignee, etc., of the concerned\nmember or shareholder.<\/p>\n\n\n\n

Stamp Duty<\/h3>\n\n\n\n

The basic difference between Transfer and\nTransmission of Shares relating to stamp duty is that stamp duty is payable on\nmarket value of shares in the case of Transfer of Shares, whereas there is no\nneed for payment of any Stamp Duty in the Transmission of Shares.<\/p>\n\n\n\n

Execution, Instrument and Nature<\/h3>\n\n\n\n

There must be an execution of a valid transfer deed\nin the case of Transfer of Shares, whereas there is no such requirement in the\ncase of Transmission of Shares. Transfer of Shares is voluntary, and\nTransmission of Shares is Compulsory.<\/p>\n\n\n\n

Transfer of Shares is a voluntary act, while Transmission\nof Shares is a compulsory act.<\/p>\n\n\n\n

Lock in Period<\/h3>\n\n\n\n

The Lock-in Period is permissible in the Transfer of Shares<\/strong><\/a> whereas not in the Transmission of Shares.<\/p>\n\n\n\n

Conclusion<\/h2>\n\n\n\n

Concluding the whole information provided here, we get that Transfer of Shares is similar to the ordinary course of the transfer, while the Transmission of Shares takes place only on death, insolvency or lunacy of a shareholder. There is a vast range of differences between the Transfer and Transmission of Shares. Transfer of Shares is a very common form of transfer where two living parties are involved. Transmission of Shares is not a common form of transfer; it involves legal representatives, etc. Transmission of Shares involves the operation of law, succession or inheritance, and there is no need for any instrument, while in another one, a transfer deed is a must. Even in the Transfer of Shares, consideration is a must, while no consideration is required in Transmission. The only similarity between the Transfer and Transmission of Shares is that they are a form of transfer for shareholder shares.<\/p>\n\n\n\n

Read our Article<\/b>:Share Transfer: Underlining Key Facts and Legalities<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"

A transfer is known as an act of movement of an asset, and for shares, this movement is voluntary or operational by law. When the movement of shares is a voluntary act[1] by the holder of shares and takes place by way of contract, then it is called Transfer of Shares. In contrast, when the […]<\/p>\n","protected":false},"author":36,"featured_media":45369,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[160],"tags":[2503],"acf":{"service_id":"227"},"authorName":"Shambhavi Suyesha","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220324-WA0005.jpg","authorDescription":"Shambhavi holds a strong legal background, having completed her BA LLB and LLM. She is particularly interested in legal research and writing, and wishes to utilise her knowledge to create informative legal content. She is an analytical researcher and keeps herself updated about the current legal affairs. She also holds prior experience in publishing articles on assorted legal areas.","postViews":7888,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45368"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=45368"}],"version-history":[{"count":7,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45368\/revisions"}],"predecessor-version":[{"id":45377,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/45368\/revisions\/45377"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/45369"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=45368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=45368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=45368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}