Table of Contents
1. Transmission vs Transfer of Shares
When an investor holding shares in Indian companies passes away, ownership does not change through a regular share sale or gift transfer. It occurs by transmission (operation of law).
Under the Companies Act 2013 and SEBI regulations, no stamp duty is payable on share transmission, but strict evidentiary proof of lawful inheritance must be submitted to the company's Registrar & Transfer Agent (RTA).
2. Three Key Legal Scenarios for Heirs
Scenario A: Joint Holdings with Survivorship
If the shares were held jointly (e.g. Husband and Wife) and one holder passes away, the surviving joint holder simply submits the death certificate, Form ISR-1, ISR-2, and a request letter to delete the deceased name from the folio.
Scenario B: Registered Nominee
Where the deceased registered a nominee with the company or depository, the nominee can claim the shares by submitting the death certificate and KYC. Note that the nominee holds the shares as a trustee on behalf of the lawful legal heirs.
Scenario C: No Nomination (Intestate Demise)
Where no nomination was registered and the shareholder died without a Will, all Class-I legal heirs (spouse, children, mother) have equal rights. They must either collectively apply or provide registered No Objection Certificates (NOCs) in favour of one claiming heir.
3. Simplified SEBI Monetary Thresholds
To reduce hardship for small investors, SEBI revised the monetary threshold limits for simplified transmission without a Succession Certificate:
- Physical Shares: Up to Rs. 5 Lakhs per listed company as on the date of application.
- Demat Shares: Up to Rs. 15 Lakhs per depository account.
Within these limits, heirs can claim transmission by submitting a notarised Legal Heir Certificate / Surviving Member Certificate along with an Indemnity Bond and Affidavits from independent sureties.
4. Mandatory Legal Documents Checklist
- Original or Notarised Death Certificate of deceased shareholder(s).
- Original share certificates or latest demat holding statement.
- Form ISR-1 (KYC) and Form ISR-2 (Banker signature verification) of the claiming heir.
- Notarised Indemnity Bond (Form B) on prescribed state stamp duty paper.
- Individual Affidavits (Form A) from each legal heir.
- No Objection Certificates (NOC) on stamp paper from all non-claiming heirs.
- Succession Certificate, Probate of Will, or Letters of Administration (for high-value folios).
5. What if Deceased Person's Shares Are in IEPF?
In cases where the deceased shareholder's folios were transferred to the IEPF Authority due to uncashed dividends, transmission must be processed either directly through the company Nodal Officer during the IEPF verification report or completed prior to IEPF-5 filing. Our advisory team coordinates both processes simultaneously to avoid duplicated effort.