Transfer of Shares and Transmission of Shares
|Basis||Transfer of Shares||Transmission of Shares|
|1. Meaning||The passing of ownership of the shares by one shareholder to another as a result of voluntary sale or gift of shares is called Transfer of shares.||The passing of ownership of of shares from one shareholder to another by the operation of law is called Transmission of the shares.|
|2. Kind of action||Transfer of shares take place when there is a sale / purchase / gift of shares. So it is a voluntary action||Transmission of shares take place in the event of death or insolvency or lunancy of the shareholders. So it is a compulsory action.|
|3. Reasons||When both the parties i.e., transferor and transferee are willing to transfer by submission of instrument of transfer by transferor. Transfer of shares take place||Transmission of shares take place only when shareholders die or become lunatic the legal representative is required to submit an evidence that proves his legal status.|
|4. Initiative||Transfer of shares is initiated by the shareholders i.e., transferor or by an authorised person.||Transmission of shares is initiated by the legal representative of the deceased shareholder.|
|5. Consideration||There must be adequate consideration in terms of money for transfer of shares unless they are transferred by way of gift.||The question of consideration in money does not aries because shares are always transmitted to legal representative without any consideration.|
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Transfer of Shares and Transmission of Shares Concept: Transfer and Transmission of Shares.