Transmission means devolution of title to shares' otherwise than by transfer, for example, devolution by death, succession, inheritance, bankruptcy, marriage etc. Transmission is different vis-á-vis Transfer as in Transmission a person acquires an interest in the property by operation of law, such as by right of inheritance or succession, whereas, Transfer is effected by act (free volition) of the parties.

While transfer of shares is brought about by delivery of a proper instrument of transfer (viz, transfer deed) duly stamped and executed, transmission of shares is done by forwarding the necessary documents (such as a notarized copy of death certificate) to the company. On the death or lunacy of the original holder (single holder), his shares vest in his legal representative. On registration of transmission of shares, the person whose name is entered in the register of shareholders becomes the shareholder of the company and is entitled to all the rights and is subject to all the liabilities as were of the original shareholder.

For effecting transmission of shares held in physical mode, one or more of the following documents are generally required to be submitted.

(a) Request letter
(b) Copy of death certificate
(c) Affidavit affirming the name of legal heirs/affidavit sworn in by the claimants.
(d) Indemnity agreeing to indemnify the company against future claims that may be made on the company. (e) NOC from other heirs in favour of person claiming the title to shares.

Wherever shares are held in electronic mode, National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL), as the case may be, could be approached for formalities to be complied with.

An investor can save its legal heirs from aforesaid legal hassles and the rigours of transmission of shares by appointing a nominee in the prescribed form, as per Section 109A (3) of the Companies Act, 1956. Such nomination overrides anything contained in any other law for the time being in force. However, nomination facility is not available to non-individuals including a society, trust, body corporate, partnership, karta of HUF and holder of POA.

Nomination is a very effective remedy in as much as once a Shareholder appoints a nominee, then as per the law, the company's liability towards the event stands discharged to the extent that it has transmitted the shares to the nominee appointed by the Shareholder.