A share transfer is the process of the transferring existing shares from one person to another; either by sales or gift. Typically, shares are transferred to introduce a new shareholder. So long as a company has enough shares, it’s possible to transfer shares in a limited company any time after incorporation. Key Differences between Transfer and Transmission of Shares
The significant differences between transfer and transmission of shares are provided below:
- When the shares are transferred by one party to another party, voluntarily, it is known as transfer of shares. When the transfer of shares happens due to the operation of law, it is referred to as transmission of shares.
- Transfer of shares is done intentionally whereas death, bankruptcy and lunacy are the reasons for transmission of shares.
- The transfer of shares is initiated by the parties to transfer, i.e. transferor and transferee. Unlike transmission of shares which is initiated by the legal representative of the concerned member.
- Transferee pays an adequate consideration to the transferor for the transfer of shares. In the case of transmission of shares, no consideration shall be paid.
- Execution of valid transfer deed is necessary when there is the transfer of shares, but not in the transmission of shares.
- When the transfer is completed, the liability of the transferor is over. On the other hand, the original liability of shares exists.
- Stamp duty is payable on the market value of shares in case of transfer while in the transmission of shares no stamp duty is to be paid