Difference between Transfer of Shares and

Transmission of Shares
(1) Transfer of Shares:

 Meaning: Transfer means transferring the shares on the name of some other person on a
voluntary basis.

 Initiative: The transfer-or and transferee takes initiative.

 Nature of Action:It is a deliberate action taken by a share holder.

 Parties: There are two parties i.e. transfer-or and transferee to the transfer of shares.

 Documents Required: An instrument of transfer has to be duly executed by the transfer-

or and transferee.

 Stamp Duty: It is payable on the market value of shares.

 Right of Refuse: The directors of the company can refuse transfer of shares on certain
grounds.

 Consideration: There must be an adequate consideration for the transfer of shares,

unless they are transferred by way of gift.

(2) Transmission of Shares:

 Meaning: Transmission of shares means the passing of property or title in shares by the
operation of law from a member to his legal representative on the happening of a certain
event like death, insolvency or lunacy.

 Initiative: The legal heir of the deceased share holder takes the initiative.

 Nature of Action: It is not deliberate action of a shareholder, but the result of operation
of law, after he dies or becomes insane or bankrupt.

 Parties: The legal heir of the deceased share holder is involved.

 Documents Required: Certain documents like court order of insolvency, death
certificate are required for transmission of shares.

 Stamp Duty: No stamp duty is payable for transmission of shares.

 Right of Refuse: Transmission of shares can't be refused, it is under operation of law.

 Consideration: The question of consideration does not arise in the case of transmission
of shares, as it is due to the operation of law.