The legal transfer of shares is called handing over of shares. When a member dies or becomes insane or insolvent, his representative gets the right to deal with the shares. In case of death, his successor or representative would have got the committee if he was insane and the state liquidator in case of bankruptcy.
According to the Chartered Institute of Secretaries, “By the shares of the statutory personal representative
Assignment is the transfer of the right concerned.” According to G.K.Baknal, the assignment of shares means the transfer of rights relating to shares of one person to another person by the operation of law.
It is thus clear that when, on the death, insanity or insolvency of a shareholder, his shares are transferred by reason of the operation of the law to his successor, representative or Government receiver, then such transfer is called transmission or transfer of shares. Following are the main features of share handing
(1) The transfer of shares takes place when the Act is in force. (2) Handing takes place without consideration. (3) The handover is to the legal heir of the owner of the share. (4) There are two parties in the handing – the applicant and the company of the handing (5) Stamp and other fees are not required in the handing. (6) In handwriting, only a simple application has to be made to the successor.