When a shareholder dies, their legal heirs or nominees must complete the process of transferring the shares in their name. A key feature of this activity includes sending a formal request letter to transfer the shares, taking note of the death, along with all documentation.
This blog explains the importance of this letter, how to draft it, what details it must include, and what the legal process involves under Indian company law.
Introduction
After a shareholder dies, there is no automatic transfer of their shares. Transfer of stock requires proper communication with the company (or registrar) with documentary proof of the shareholder’s death, such as a death certificate, evidence of a succession (if necessary), and the usual identification process.
The first step is writing to the company requesting the shares be transferred, which will be considered official notice to the company and the beginning of the documentation, mandate, and verification process. This letter ensures that the shares held by the deceased are passed on to the rightful heir or nominee, in accordance with the Articles of Association of the company and the applicable legal provisions.
Why is a Share Transfer Letter Required After Death?
Shares are considered movable property, and like any other asset, they can be inherited. But to update the shareholding records and allow legal heirs to exercise shareholder rights, the company needs –
- A formal intimation about the shareholder’s death
- A request letter for the transmission of shares
- Legal documents proving succession, nomination, or probate
The letter acts as a written application to the company or its Registrar and Share Transfer Agent (RTA), notifying them of the situation and requesting the transfer of ownership in the company’s share register.
This process is commonly referred to as “transmission of shares”, which is different from a sale or transfer, since it happens by operation of law.
When is This Letter Used?
You will need to write this letter in the following cases –
- The deceased held shares in a private company or a public company
- You are a legal heir, nominee, or executor of the will
- There is a need to claim dividends, vote at meetings, or sell shares
- No earlier nomination was made and you hold a succession certificate
The letter should be submitted as soon as possible to avoid delays in accessing shareholder rights or settling the estate.
Who Can Write This Letter?
The following persons can write and submit the letter –
- Nominee registered with the company under Section 72 of the Companies Act
- Legal heir(s) or successor(s) named in a succession certificate or court order
- Executor or administrator of the deceased’s estate as per the will
- A guardian in case the nominee or heir is a minor
If multiple heirs are involved, a no-objection affidavit from other claimants may be required to support the request.
Sample Letter Format for Transfer of Shares Due to Death
To,
The Company Secretary
[Company Name]
[Company Address]
Subject: Request for Transmission of Shares Due to the Death of a Shareholder
Dear Sir/Madam,
I, [Your Full Name], presently residing at [Your Address], do hereby very sadly inform you of the passing of [Deceased’s Full Name], who was/held [Number] equity shares in your company under Folio No. [Folio Number]/DP ID–Client ID [if in demat form].
The deceased shareholder passed away on [Date of Death], and I am [mention your relation, e.g., the legal heir/nominee/spouse/son/daughter] and hereby request you to transmit the said shares in my name.
I am enclosing the following documents for your reference and necessary action –
- Self-attested copy of the Death Certificate
- Copy of PAN and Aadhaar of the deceased and the applicant
- Succession Certificate / Probate / Will (if applicable)
- Share certificate(s) (for physical shares)
- Indemnity Bond and Affidavit (as required)
- A passport-size photograph of the applicant
I request you to kindly process the transmission at the earliest and inform me of any further requirements.
Thanking you,
Yours sincerely,
[Signature]
[Full Name of Applicant]
[Contact Number & Email ID]
[Date]
Supporting Documents Required for Share Transfer
The company or RTA will ask for –
- Original or attested copy of death certificate
- Copy of share certificate(s) (if in physical form)
- KYC documents of the applicant – PAN, Aadhaar, and address proof
- Succession certificate, will, or court order
- Indemnity bond and affidavit, especially in the absence of a will
- Cancelled cheque or bank details of the claimant
- Duly filled transmission form (if required by the RTA)
For demat shares, the transmission request must be submitted through the depository participant (DP) along with the required forms.
Processing Time and the Company’s Role
Once the company or its registrar receives the letter and complete documents, they will verify the claim. If everything is in order –
- Shares are transmitted in 15–30 days
- A new share certificate (or demat credit) is issued in the applicant’s name
- Future communication and dividend benefits are updated accordingly
If there are disputes among heirs or legal documents are missing, the company may put the request on hold until it’s resolved.
Conclusion
The letter for a transfer of shares due to death is a very important legal process in transferring share ownership rights from a deceased shareholder to the legal successor. While the process may feel cumbersome, a carefully worded letter, together with the proper documents, makes the transfer of shares a smooth and legal transition.
Whether you are a nominee or a legal heir, addressing this early and with full compliance avoids complications and ensures that you or your family can continue managing the shareholder rights without delay.
References
The Companies Act, 2013
The Companies (Share Capital and Debentures) Rules, 2014
https://www.mca.gov.in/
