What is the Difference Between Transfer and Transmission of Shares?

The difference between the transfer and transmission of shares lies in the circumstances, processes, and legal implications associated with each. Here are the key differences:

Transfer of Shares:
Voluntary act initiated by the transferor or transferee.
Takes place by way of contract.
Requires a transfer deed for the transfer of shares.
The transferor's obligations (liability) are discharged once the transfer is complete.
Capital gains tax may be attracted.
Transmission of Shares:
Occurs due to the operation of law, such as the death of the shareholder or insolvency.
Initiated by the legal heir or receiver.
No transfer deed is executed.
The transferee will be given the rights to the shares, and the transmission is recorded only when the transferee gives proof of entitlement to the shares.
No stamp duty is required.

In summary, the transfer of shares is a voluntary act that takes place by way of contract, while the transmission of shares occurs due to the operation of law, such as the death or insolvency of the shareholder. The transfer of shares requires a transfer deed and may attract capital gains tax, whereas the transmission of shares does not require a transfer deed and does not attract stamp duty.

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What is the Difference Between Transfer and Transmission of Shares?

Comparative Table: Transfer vs Transmission of Shares

Here is a table highlighting the differences between the transfer and transmission of shares:

Feature	Transfer of Shares	Transmission of Shares
Meaning	Transfer of shares refers to the voluntary transfer of ownership of shares from one person to another.	Transmission of shares refers to the transfer of ownership of shares by the operation of law, such as when the shareholder dies or becomes insolvent.
Initiated by	Transferor and transferee.	Legal heir or receiver.
Documentation	Requires a valid transfer deed.	No transfer deed is required.
Consideration	Adequate consideration must be provided.	No consideration is paid.
Liability	Liabilities of the transferor cease on the completion of the transfer.	The original liability of the shares continues to exist.
Stamp Duty	Payable on the market value of the shares.	No need to pay stamp duty.

Transfer of shares is a voluntary act that takes place by way of contract, while transmission of shares occurs due to the operation of law, such as in cases of the shareholder's death or insolvency. A transfer deed is executed for the transfer of shares, whereas no such instrument is required for the transmission of shares.

Guilherme Mazui

Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.