Transmission of Shares in Succession Law

Transmission refers to the automatic transfer of ownership of a shareholder’s share by operation of law upon the said shareholder’s demise or bankruptcy. Transmission of shares safeguards the continuity of membership in a company which fortifies the sustainability of the day-to-day running of a company as it mitigates the possibility of disruptive withdrawal of shareholders.

The Law

- Section 497 of the Companies Act provides that a company may only register a transfer of shares if a proper document of transfer(transfer of shares form) has been delivered to it, failure to which the said transfer is rendered void.

- The succession of shares of a deceased shareholder is regulated by the Law of Succession Act Cap 160 and the Companies Act No. 17 of 2015.

Documents required for Transmission of Shares.

The following documents should be lodged at the Companies registry in order to effect the transfer of shares by transmission to a beneficiary: -

• Certified copy of the Death certificate of the deceased shareholder;
• Certified copy of Identification card or surrender form of the deceased shareholder.
• Certified copy of the grant of letters of administration in the event the shareholder died intestate or certified copy grant of probate in the event the shareholder died testate;
• Certified copy of Certificate of confirmation of Grant from the High Court.
• Certified copy of the Identity card of the personal representative and/or administrator;
• Certified copy of the Identity card of the Beneficiary;
• Original share certificates of the subject companies; and
• Duly filled transfer of shares form.