4.5 Transfer and transmission

4.5 TRANSFER AND TRANSMISSION

Transfer of shares

Transfer of shares refers to the process of transferring ownership of shares from one shareholder to another.
Shareholders may choose to transfer their shares for various reasons, such as selling them to another investor, gifting them, or transferring them as part of a business transaction.
The transfer of shares involves a change in legal ownership, but the shares remain with the same class and rights as originally issued.
The transfer process is typically initiated by the transferor (seller) and requires the transferor to execute a share transfer form or instrument, which is then delivered to the company or its registrar.
The company or its registrar updates the register of members to reflect the transfer and issues a new share certificate or updates the electronic shareholding record for the transferee (buyer).

Transmission of shares:

Transmission of shares refers to the transfer of shares due to the death, bankruptcy, or insolvency of a shareholder.
In the case of transmission, the shares pass to the legal representative or successor of the deceased or bankrupt shareholder.
The transmission process is governed by the relevant laws and regulations, as well as the company’s articles of association or constitution.
The legal representative or successor is required to provide the necessary legal documentation, such as a death certificate, probate order, or court order, to establish their entitlement to the shares.
The company or its registrar updates the register of members to reflect the transmission and issues a new share certificate or updates the electronic shareholding record for the new shareholder.

Note:

Both transfer and transmission of shares require compliance with the company’s constitutional documents, applicable laws, and regulations.
The transfer or transmission process may involve notifying the company or its registrar, completing the necessary forms or instruments, and providing supporting documentation.
Companies may have specific procedures and requirements for share transfers or transmissions, including any restrictions on transferability outlined in the articles of association or shareholders’ agreements.
It is common for companies to charge a fee for processing share transfers or transmissions to cover administrative costs.
Shareholders should ensure that they follow the prescribed procedures and seek legal advice if necessary to ensure a smooth and legally valid transfer or transmission of shares.