Transmission of Shares explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
When a shareholder dies, the shares do not need a sale: they pass by "transmission", and the person entitled asks the company, or the depository participant for demat shares, to recognise the change. Who is that person depends on whether a nomination exists, whether the shares were held jointly, and what the deceased's own succession law and any will provide. This guide reads the Companies Act, 2013 in the Ministry's consolidated text (last updated 29 July 2022), the Share Capital Rules as consolidated in the Ministry's e-book (consulted on 3 October 2026) and the Indian Succession Act, 1925. Later amendments should be checked.
A nominee under section 72 becomes entitled to all the rights in the securities on the holder's death, to the exclusion of all other persons, unless the nomination was varied or cancelled. Without a nomination, a surviving joint holder or the legal representative is recognised under the company's articles (Table F, clause 23 is the model). The company may register a transmission on intimation (section 56(2)) and must deliver certificates within one month of receiving it (section 56(4)(c)). Whether a succession certificate or probate is also needed turns on the facts and the company's requirement.
What the Act says
Section 56(2) says the company's power to register on receipt of intimation of transmission of any right to securities by operation of law, from any person to whom the right has been transmitted, is not prejudiced by the transfer rules. Section 56(4)(c) requires certificates of securities transmitted to be delivered within one month from the date the company receives the intimation of transmission. Section 56(5) says a transfer of a deceased person's securities made by his legal representative is valid even if the legal representative is not a holder, as if he had been the holder at the time of execution.
If you want the transmission handled end to end, see our share transfer and transmission service.
Section 72 deals with nomination. Every holder may nominate any person to whom the securities vest on death (72(1)); joint holders may together nominate for the event of death of all of them (72(2)). Under 72(3), despite any other law or any disposition by will, the nominee on death becomes entitled to all the rights, to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner. For a minor nominee, the holder may appoint a person to become entitled if the nominee dies during minority (72(4)).
Rule 19 of the Share Capital Rules adds the mechanics: a nomination in Form SH-13, an entry in the register (rule 19(1) and (2)); recorded by the company within two months of receiving a duly filled and signed form (rule 19(4)); variation or cancellation in Form SH-14 (rule 19(9)). After death, the nominee may, on producing such evidence as the Board requires, elect either to be registered as holder or to transfer the securities as the deceased could have done (rule 19(5)). A nominee electing registration sends a signed written notice with the death certificate (rule 19(6)). Until registered, a nominee gets the dividends but cannot exercise membership rights at meetings (rule 19(8)); the Board may require election and, if the notice is not complied with within ninety days, withhold dividends and other money until it is.
The company's articles: the model in Table F
Table F in Schedule I is the model set of articles. The company's own articles govern; the model shows the usual pattern.
- Clause 23: on the death of a member, the survivor or survivors where he was a joint holder, and his nominee or nominees or legal representatives where he was a sole holder, are the only persons recognised as having title to his interest in the shares. The estate of a deceased joint holder remains liable for the shares jointly held.
- Clauses 24 and 25: the person entitled may elect to be registered or to transfer, on evidence the Board properly requires; the Board has the same right to decline or suspend registration as it would have had if the member had transferred before death.
- Clause 26: the person entitled gets dividends and advantages but, before registration, no membership rights at meetings; after notice, ninety days to elect, or the Board may withhold payments.
- Clause 27 (One Person Company): on the sole member's death, the nominee is recognised as having title to all the shares, is informed by the Board, takes the same dividends, rights and liabilities, and on becoming a member must nominate another person with that person's prior written consent.
When a succession certificate or probate comes in
The Companies Act sets no rule that a succession certificate is required. The Board may ask for evidence under rule 19(5) and the articles, and the evidence it asks for depends on whether there is a nominee, a will, joint holders, and the size of the estate. The Indian Succession Act, 1925 gives the background for what the legal representative proves:
- Section 211: an executor or administrator is the deceased's legal representative for all purposes, and the property vests in him; for a Hindu, Muhammadan, Buddhist, Sikh, Jaina, Parsi or exempted person, property passing by survivorship to another person does not vest in him.
- Sections 212 and 213: a right to intestate property or as executor or legatee can be established in court only on letters of administration or probate, with the exemptions the sections print for communities and Wills.
- Section 214: no court shall pass a decree against a debtor of a deceased person, or execute one, for a person claiming succession, unless he produces probate, letters of administration, a certificate under the Administrator-General's Act, a succession certificate under Part X, or the other certificates listed.
- Sections 370 to 373: a succession certificate may be granted for a "security", which includes a share in a company, but not where a right is required by section 212 or 213 to be established by probate or letters of administration; the District Judge where the deceased ordinarily lived (or where property is found) grants it on a petition giving the particulars of section 372, after notice and a summary hearing (section 373). See our guide on section 214.
These are court-facing provisions. Whether a company accepts an indemnity and the nominee's documents in place of a certificate is for its Board under its articles; do not treat the Succession Act as a rule of company procedure.
Physical and demat shares
For physical shares, the person entitled sends the company the intimation of transmission with the death certificate and the evidence the Board requires, under section 56(2), rule 19(5) and (6) and the articles; the company registers the transmission and delivers certificates within one month (section 56(4)(c)).
For demat shares, the Depositories Act is not among our sources. The route is through the depository participant under the depository's procedure; this article states nothing more about it.
| Situation | Physical shares | Demat shares |
|---|---|---|
| Nominee exists | Nominee elects to register or transfer on evidence the Board requires (rule 19(5), (6)) | Through the depository participant under the depository's procedure |
| No nominee, sole holder | Legal representative recognised under the articles (Table F clause 23); evidence as the Board requires | Same route |
| Joint holders, one dies | Survivor recognised (Table F clause 23); estate remains liable for the joint holding | Same route |
| Dispute or will | Probate, letters of administration or certificate as the facts and the Board require | Same route |
Worked example (invented names)
Mr Raman Iyer held 5,000 physical equity shares of Orion Foods Private Limited alone and had made a nomination in Form SH-13 for his daughter Priya. He dies. Priya, the nominee, sends the company a signed notice that she elects to be registered, with the death certificate, under rule 19(6). Under section 72(3) she is entitled to the rights to the exclusion of other persons. The company registers her and must deliver the certificate within one month from receiving her intimation (section 56(4)(c)). Had Raman made no nomination, the company would look to his legal representative under Table F clause 23 and the evidence its Board requires.
Common mistakes
- Waiting for a will or probate when a valid nomination already vests the shares in the nominee (section 72(3)).
- Treating a nomination as ending a dispute with legal heirs without checking what the section and the company's evidence rules say.
- Missing the ninety-day election notice and losing dividends meanwhile.
- Forgetting that a nominee cannot attend or vote as a member until registered.
- Treating transmission by operation of law (section 56(2)) as if it were a transfer by instrument under section 56(1).
Need help with a transmission?
We can check the nomination, the evidence the company's articles require, and the intimation and follow-up, and tell you whether a succession certificate or probate is a real requirement in your case. See our share transfer and transmission service.
Key takeaways
- A valid nomination vests the securities in the nominee (section 72(3)).
- Without it, the articles name the persons recognised (Table F clause 23 as the model).
- Certificates follow within one month of the intimation (section 56(4)(c)).
- A nominee has dividends but no meeting rights until registered.
- Succession certificate and probate are court instruments that the company may ask for as evidence.
Read next
- Transfer and Transmission of Shares: Key Differences and Process
- Section 214 of the Indian Succession Act, 1925
- Stamp Duty on Shares: Issue, Transfer and Gift
- Is a Valuation Report Needed When Shares Are Transferred
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.