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Answer» Transfer of Shares and Transmission of Shares | Basis | Transfer of Shares | Transmission of Shares | | 1. Meaning | The passing of ownership of the shares by one shareholder to another as a result of voluntary sale or gift of shares is called Transfer of shares. | The passing of ownership of of shares from one shareholder to another by the operation of law is called Transmission of the shares. | | 2. Kind of action | Transfer of shares take place when there is a sale / purchase / gift of shares. So it is a voluntary action. | Transmission of shares take place in the event of death or insolvency or lunancy of the shareholders. So it is a compulsory action. | | 3. Reasons | When both the parties i.e., transferor and transferee are willing to transfer by submission of instrument of transfer by transferor. Transfer of shares take place. | Transmission of shares take place only when shareholders die or become lunatic the legal representative is required to submit an evidence that proves his legal status. | | 4. Initiative | Transfer of shares is initiated by the shareholders i.e., transferor or by an authorised person. | Transmission of shares is initiated by the legal representative of the deceased shareholder. | | 5. Consideration | There must be adequate consideration in terms of money for transfer of shares unless they are transferred by way of gift. | The question of consideration in money does not aries because shares are always transmitted to legal representative without any consideration. |
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