In case of transmission of shares, which of the following is correct? A. No instrument of transfer is…
Transmission of shares takes place by operation of law upon the death, lunacy, or insolvency of a shareholder (D is correct). Because it is an involuntary legal devolution…
Choose your answer
In case of transmission of shares, which of the following is correct?
A. No instrument of transfer is required.
B. Transmission of securities is generally made without any consideration.
C. Shares continue to be subject to the original liabilities.
D. Transmission takes place on death or insolvency of a holder of securities.
E. Stamp duty is payable on transmission of securities.
Answer and explanation
Correct answer A
Transmission of shares takes place by operation of law upon the death, lunacy, or insolvency of a shareholder (D is correct). Because it is an involuntary legal devolution rather than a voluntary bilateral sale, no formal instrument of transfer is required (A is correct), it occurs without monetary consideration (B is correct), the shares remain subject to any existing liabilities/company lien (C is correct), and no stamp duty is payable on transmission (E is false).
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UGC NET Commerce