Difference Between Share Transfer and Share Transmission

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Learn about the different aspects of share transmission and transfer. By acquiring knowledge of the complex processes, deadlines, and financial consequences, you will be better equipped to manage your shareholdings.

Understanding the different aspects of processes like share transfer and share transmission is important for managing share ownership. These processes control the transfer of ownership, affecting the rights and responsibilities of investors. 

In this blog, we'll explain in detail the differences between share transmission and transfer, equipping you with the information you need to handle different aspects of share ownership. 

Highlights of the Blog:

  • Understanding share transfer vs. share transmission differences

  • Procedures under the Companies Act, 2013

  • Share ownership changes tips for shareholders.

Share Transfer: A Voluntary Exchange

A voluntary transfer of ownership between two living entities is called a share transfer. The transferor (seller) and the transferee (buyer) must both agree for it to begin. Following regulatory procedures is essential to the process, which includes submitting the necessary documents and paying the stamp duty. The necessary identity credentials and the transfer deed serve as crucial documents in the share transfer process. Subject to regulatory timelines, share transfer registrations are normally handled in 15–30 days. Service costs, transaction fees, and stamp duties are expenses related to share transfers. The liability of the transferor passes to the transferee upon completion of the transfer.

Transmission of Shares: Involuntary Succession

On the other hand, when a shareholder passes away, share transmission happens automatically. It does not require explicit agreement from the individuals involved because it is triggered by legal provisions. The transmission process is centred on proving successor claims are legitimate by submitting supporting documents. Nominee attestations, succession proof and death certificates are among the documents needed for share transmission. The procedure of transferring shares usually takes one to three months since proving legal heirship might be challenging. Aside from statutory levies, share transmission often has no major expenses. Post-transmission, the original liabilities of the shares stay with the new shareholder.

Procedures Under the Companies Act, 2013

  1. Share Transfer: The Companies Act, 2013, sets out specific procedures for share transfers, including the execution of a transfer deed and submission of relevant documents.

  2. Share Transmission: To transfer shares, the legal heirs or nominees must stick to the criteria outlined in the Companies Act of 2013 and provide the required supporting evidence to establish their rightful ownership of the shares.

Key Differences: Share Transfer vs. Share Transmission

  1. Initiation: While share transmission is triggered by legal circumstances, share transfer is started by the parties' mutual consent.

  2. Voluntariness: While share transmission happens involuntarily, share transfer is a voluntary process.

  3. Documents: Documentation is needed for share transmission in order to prove the successors' legal claim, and documents are needed for share transfer to enable the exchange of shares.

  4. Timelines: While share transmission may take longer owing to the certification of legal heirship, share transfer procedures are often accomplished in 15 to 30 days.

  5. Costs: While share transmission is often less expensive, share transfer may incur costs including transaction fees and stamp duties.

Share Ownership Changes: A Comprehensive Approach

  1. Understanding Requirements: Get familiar with the Companies Act of 2013 and the corresponding regulations that oversee the transfer and transmission of shares.

  2. Seeking Legal Advice: To make sure that all legal criteria are met and the right documents are submitted, consider talking to legal experts.

  3. Examining Shareholder Agreements: If relevant, go over shareholder agreements to make sure you understand any additional clauses or guidelines about the transmission and transfer of shares.

  4. Keeping Accurate Records: For the purpose of future reference and compliance audits, keep accurate records of every share transfer and transmission paperwork.

  5. Keeping Up to Date: To ensure ongoing compliance and adherence to best practices, stay updated on modifications to legislation and rules impacting share ownership.


The two distinct methods governing the transfer of share ownership are share transfer and share transmission. While share transmission happens automatically in certain events, including the death of a shareholder, share transfer requires voluntary agreements between parties. Investors can protect their rights and interests and successfully manage changes in share ownership by staying informed of the differences between these procedures and abiding by the rules and regulations.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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