TRANSMISSION OF SHARES

TRANSMISSION OF SHARES

Share transmission is a mechanism by which the title to shares is devolved other than by transfer. This is typically applicable for:
devolution by death
succession
inheritance
bankruptcy
marriage
When a previous owner of shares dies and his shares are inherited by his personal representatives or heirs, this is called transmission of shares.Shares may be inherited only by production of probate of a will of the deceased owner or letters of administration of his estate granted by the High Court. The beneficiaries of the shares by transmission must have their names entered in the register of members of the company or elect a nominee to hold the shares on their behalf. In this case the nominee’s name shall be entered in the Register of members of the company to become a member of the company.

Transmission of shares occurs when the shares of a deceased share holder are inherited or bequeathed to an heir or personal representative of the deceased shareholder. Where shares are held by two or more persons jointly then upon death of one or more of them, the surviving person shall be entitled to all the shares and they may be transferred to his name. Where the shareholder held the shares as a sole owner, then his shares may be transferred only to the person named in his will or if he died without a will, then to the person who obtains letters of administration from the High Court in respect of the shares or the deceased’s property. The above are in Law recognized as the personal representatives of the deceased share holder and are entitled to have his shares transferred to them or their nominee.