What is transmission of shares? State its reasons.

Meaning: Transmission of shares means the transfer of title to shares by the operation of law. Transmission is done in case of death, lunacy (madness) or insolvency (bankruptcy) of a member by passing the ownership of shares to the legal representative.

1. It is compulsory action taken in case of death, insolvency or lunacy of a member.

2. Shares are transmitted to legal representative (spokesperson) only.

3. In case of transmission shares are transmitted to legal representative without consideration.

4. Consideration or money is not involved in the transaction therefore stamp duty not required to be put.

5. In case of transmission the person in whose name the shares are transmitted has to give a proof that he is a legal representative of the concerned member

6. After transmission of shares liability of original members is continued with the person to whom the shares are transmitted.