Transmission vs. Transfer of Shares: What is the Difference for Legal Heirs?

A Critical Distinction Every Legal Heir Must Understand

When a shareholder passes away, their legal heirs face the task of getting the shares transferred to their own names. However, the process is fundamentally different from a regular share transfer, and confusing the two can lead to significant delays and complications. Understanding the difference between "Transmission" and "Transfer" is the first step in a successful claim.

What is Transfer of Shares?

Transfer of shares is a voluntary act between two living parties. It occurs when a shareholder decides to sell, gift, or otherwise convey their shareholding to another person or entity. Key characteristics include:

• Voluntary Action: Initiated by the shareholder's own decision
• Consideration: Usually involves monetary consideration (sale) or is done as a gift
• Instrument of Transfer: Requires execution of a proper Share Transfer Form (Form SH-4 under the Companies Act, 2013)
• Stamp Duty: Stamp duty is payable on the transfer deed
• SEBI Requirement: For listed companies, transfers must now be done only in dematerialized form

What is Transmission of Shares?

Transmission of shares occurs by operation of law — it is NOT a voluntary act. It happens when shares automatically devolve upon legal heirs following the death of the shareholder, or in cases of insolvency or mental incapacity. Key characteristics include:

• Operation of Law: Not initiated by choice, but by a legal event (death, insolvency, etc.)
• No Consideration: No payment is involved — shares pass to heirs as a matter of legal right
• No Transfer Deed: Instead of a transfer form, heirs submit transmission documents: an affidavit-cum-NOC and indemnity for smaller holdings, or a will, legal heirship certificate, succession certificate or letters of administration for larger ones
• No Stamp Duty: Transmission does not attract stamp duty
• Can Be Physical or Demat: Unlike transfers, transmission can still be processed for physical certificates (though dematerialization is strongly recommended afterwards)
• Corporate Equity & ESOPs: In cases of startup equity or employee equity options, heirs can reference the Inc42 Guide on ESOPs & Startup Equity to understand vesting and inheritance mechanisms under Indian company law

Documents Required for Transmission

The documentation requirements for transmission depend on whether the deceased shareholder had a nominee or not:

With a Registered Nominee

• Death Certificate: Certified copy of the deceased holder's death certificate
• KYC of Nominee: PAN, Aadhaar, and address proof of the nominee
• Demat Account CML: Client Master List of the nominee's Demat account
• Transmission Request Form: As prescribed by the RTA

Without a Nominee (Legal Heir Claim)

• Death Certificate: Certified copy of the deceased holder's death certificate
• Proof of Entitlement: For physical holdings up to ₹10 lakh per company or demat holdings up to ₹30 lakh, the affidavit-cum-NOC and indemnity below are enough. Above those limits, a will, legal heirship certificate, succession certificate, letters of administration or court decree is also needed. Probate is no longer mandatory in uncontested cases
• Affidavit-cum-NOC: A single combined affidavit and no-objection certificate signed by the legal heirs, replacing the separate NOCs previously collected from each heir
• Indemnity Bond: Notarised, on non-judicial stamp paper
• Family Tree: Certified family tree or pedigree chart
• KYC of Claimant(s): Complete KYC documentation of all claiming heirs

SEBI raised these value limits in July 2026. Our guide to transmission without a succession certificate explains the current rules in detail.

If a valid nominee exists, the RTA processes the claim through the nominee. Without one, legal heirs claim with simplified documents below SEBI's value limits, and need a will, legal heirship certificate or court document such as a succession certificate above them.

Common Mistakes Legal Heirs Make

• Using a Transfer Form Instead of Transmission Request: This is the most common error. Transfer forms are for living parties and will be rejected for deceased holder claims
• Incomplete Legal Documentation: Filing without the documents that match the value of the holding, such as a legal heirship certificate or succession certificate for holdings above SEBI's limits
• Ignoring Other Heirs: Not obtaining NOCs from all legal heirs can stall or invalidate the process
• Not Updating KYC After Transmission: Failing to update all KYC details (PAN, bank mandate, address) after transmission is complete

Multi-Heir Estates: Special Considerations

When multiple heirs are entitled to the deceased's shares, additional complexity arises. Shares must often be split or transmitted to individual Demat accounts, requiring all heirs to sign consent letters. In case of disputes among heirs, the court may appoint a receiver or require mediation.

How We Help Legal Heirs

Global Equity Solutions specializes in navigating these multi-party situations. Our legal team handles everything from drafting comprehensive family settlement deeds to obtaining Succession Certificates and filing transmission requests with RTAs. Under our Zero Advance Policy there is no advance professional fee — our fees are contingent strictly on successful transmission of shares to the rightful heirs. Court fees for the Succession Certificate, stamp duty on settlement deeds and notary charges are paid by the family at actuals.