Question

Distinguish between: Transfer of shares and Transmission of shares

Hint:

Think of it this way: {Transfer} = a conscious {Trade}. {Transmission} = an automatic {Takeover} by law.

Answer 1

The core distinction lies in the cause and action. Transfer of shares is a deliberate, voluntary act by the shareholder to sell or gift their shares, while transmission is an automatic process that happens by operation of law due to events like the death, insolvency, or insanity of the shareholder.

Basis of Distinction	Transfer of Shares	Transmission of Shares
Meaning	It is the voluntary handing over of rights and duties of a member from one person to another.	It is the passing of property or title in shares from a shareholder to their legal representative by operation of law.
Action	It is a voluntary and deliberate action by the shareholder.	It is an involuntary action that happens automatically.
Reason	It is done to sell shares, give them as a gift, or for any other personal reason.	It takes place on the death, insolvency, or insanity of the shareholder.
Consideration	Transfer usually involves a monetary consideration (a price).	No consideration is involved; the legal heir acquires the shares without payment.
Instrument	A formal 'Share Transfer Deed' needs to be executed by both the transferor and the transferee.	No transfer deed is required. Proof of entitlement (like a death certificate or succession certificate) is sufficient.