Draft Board Resolution for Transmission of Shares of Company

Transmission of shares is the process of transfer of shares by operation of law. Transmission of shares happens when the registered member (shareholder) of a company dies or is adjudicated insolvent or lunatic by a competent court.

After the death of the deceased shareholder, his legal heir(s) or representative(s) apply to the company to remove the name of the deceased shareholder from the Register of Members of the company and put his/their name(s) in his place.

In order to process and approve the transmission request, the company needs certain documents viz. application letter whether in plain paper or in Transmission Request Form, original share certificates, certified true copy of court order, death certificate, succession certificate, indemnity bond, etc.

The Board of Directors will review and consider the request and if all the requirements are fulfilled, then the application will be approved. A resolution is passed in the board meeting. Here are samples of the same for your reference.

FORMAT #1

(Approval of Transmission Request)

#. To Approve an Application for Transmission of Shares

The Company Secretary informed the Board that the company has received an application in writing from (Name of the Person) for transmission of (Number) equity/preference shares of the company. The management has verified the documents submitted by the applicant and has found everything in order. The application for transmission along with share certificates, death certificate, succession certificate, and other supporting documents were tabled before the Board for perusal and consideration.

Upon motion duly passed and seconded, it was:

“RESOLVED THAT the application for transmission of equity/preference shares as per the following details be and is hereby approved.

Folio No. | Name of the Shareholder | Number of Shares | Distinctive Nos. (From) (To) | Face Value

..................................................................................

RESOLVED FURTHER THAT the copy of the application along with the original share certificates,  death certificate, succession certificate, legal heir certificate, court order for probate of the Will, indemnity bond and affidavit by the application, identity and address proofs of the applicant as placed at the meeting before the Board be and is hereby noted.

RESOLVED FURTHER THAT the name of the applicant being the legal representative of the deceased shareholder be entered in the Register of Members of the company in place of the deceased shareholder.

RESOLVED FURTHER THAT (Name of the Company Secretary), Company Secretary be and is authorised to do all such acts, deeds and things as may be necessary or incidental in this connection.”

FORMAT #2

(Transmission in favour of Nominee of the Deceased Shareholder)

“RESOLVED THAT the application for transmission of ___ equity/preference shares of Rs. ___ each standing in the name of (Name of the Deceased Shareholder), who has expired on (Date), under Folio No. ___ bearing distinctive Nos. from __________ to _________ under certificate no. ___ be and is hereby approved.

RESOLVED FURTHER THAT the copies of the application, death certificate, legal heir certificate, court order for probate of the Will, indemnity bond, affidavit, identity and address proofs of the applicant as tabled before the Board be and is hereby noted.

RESOLVED FURTHER THAT the aforesaid shares be transmitted to and registered in the Register of Members of the company in the name of (Name of the Person) being the nominee of the said deceased shareholder and the applicant for transmission.

RESOLVED FURTHER THAT (Name of the Company Secretary), Company Secretary be and is directed to do all such acts, deeds and things as may be necessary or incidental in this connection.”

FORMAT #3

(Refusal of Transmission Application)

#. Rejection of Transmission Request

The Company Secretary informed the Board that a request is received from a person for transmission of (Number) Equity shares of the company. An application for transmission was received with the original certificates and some other supporting documents. However, no certified copy of the court order granting probate of the Will of the deceased shareholder in favour of the applicant was received. Hence, it was recommended to refuse such a transmission request. The Board took note of the documents.

Upon motion duly passed and seconded, it was:

“RESOLVED THAT the request for transmission of ___ equity shares held by a deceased shareholder under Folio No. ___ bearing distinctive Nos. from __________ to _________ having certificate no. ___ to (Name of the Applicant), the applicant as the executor of the estate of late (Name of the Deceased Shareholder) be and is hereby rejected in the absence of an order of Court granting probate of the Will of the deceased in favour of the said applicant.

RESOLVED FURTHER THAT (Name of the Company Secretary), Company Secretary be and is directed to inform the applicant of the transmission request accordingly.”