Difference Wiki

Transfer of Shares vs. Transmission of Shares: What's the Difference?

Edited by Harlon Moss || By Janet White || Published on March 16, 2024
Transfer of shares is a voluntary act of a shareholder to transfer ownership, while transmission of shares occurs due to death, bankruptcy, or inheritance.

Key Differences

Transfer of shares is a voluntary act, initiated by the shareholder or the share's current owner, often for reasons like sale or gift. Transmission of shares, however, occurs involuntarily, triggered by events such as the death, bankruptcy, or incapacity of a shareholder.
The transfer of shares typically involves a formal agreement and adherence to company and legal procedures, including transfer deeds. In contrast, transmission of shares does not involve a transfer deed but requires legal proof of entitlement, like a will or legal succession document.
In a transfer of shares, the new owner acquires all rights and obligations from the date of registration. Transmission of shares, on the other hand, grants the receiver the rights and obligations of the shares from the date of the original owner's demise or incapacity.
Both processes result in a change in the company's shareholder register. However, the transfer of shares reflects a change by the shareholder's choice, whereas transmission reflects a change due to legal necessity.
Transfer of shares requires submission of a share transfer form and is subject to approval by the company's board. Transmission involves legal documents proving entitlement and is recognized upon the company's verification of these documents.

Comparison Chart


Voluntary, initiated by shareholder
Involuntary, due to death, bankruptcy, inheritance

Legal Process

Formal agreement, transfer deed required
No transfer deed, requires legal proof of entitlement

Acquisition of Rights

From date of registration
From date of original owner's demise/incapacity

Change in Shareholder Register

Reflects shareholder's choice
Due to legal necessity

Documentation and Approval

Share transfer form, board approval
Legal documents of entitlement, company verification

Transfer of Shares and Transmission of Shares Definitions

Transfer of Shares

This transfer is subject to company policies and shareholder agreements.
The transfer of shares was delayed due to restrictions in the shareholder agreement.

Transmission of Shares

It ensures the continuity of ownership in unforeseen circumstances.
The company facilitated the transmission of shares to maintain stability after the major shareholder's passing.

Transfer of Shares

It can occur between individuals, entities, or both.
The transfer of shares to the trust was part of his estate planning.

Transmission of Shares

It involves the legal transfer of share ownership to the rightful heir or legal representative.
The transmission of shares was completed once the probate was granted.

Transfer of Shares

Share transfer is executed via a share transfer form.
She submitted a share transfer form to sell her shares to a colleague.

Transmission of Shares

Transmission is governed by laws of succession or bankruptcy.
The transmission of shares to her children was in accordance with the state's succession laws.

Transfer of Shares

Transfer of shares is the voluntary handover of ownership rights in a company.
He completed a transfer of shares to diversify his investment portfolio.

Transmission of Shares

Transmission of shares occurs upon the death, bankruptcy, or incapacity of a shareholder.
The transmission of shares to his heirs was initiated after his untimely demise.

Transfer of Shares

It involves legally changing the shareholder's name in company records.
The transfer of shares was recorded in the company's register after the board's approval.

Transmission of Shares

This process does not require a traditional share transfer form.
For the transmission of shares, the executor presented the will instead of a transfer deed.


What triggers the transmission of shares?

It's triggered by death, bankruptcy, or incapacity of a shareholder.

What documentation is needed for transmission of shares?

Legal documents like death certificates or probate.

What are the rights of a new owner after transfer of shares?

They gain all shareholder rights from the date of registration.

Can transfer of shares be rejected?

Yes, if it violates company policy or shareholder agreements.

Can any shareholder initiate a transfer of shares?

Yes, if they comply with company policies and shareholder agreements.

What is a transfer of shares?

It's the voluntary change of share ownership from one person/entity to another.

Can a company refuse transmission of shares?

Only if it violates legal or regulatory requirements.

How is transfer of shares executed?

Through a share transfer form and board approval.

Is transmission of shares automatic?

It requires legal validation but is generally automatic.

How does transmission of shares affect shareholder rights?

The transferee gains rights from the original owner's demise/incapacity.

Does transmission of shares involve taxes?

Yes, it can involve inheritance or estate taxes.

Are there any restrictions on transfer of shares?

Yes, based on company policies and shareholder agreements.

Is the transfer of shares taxable?

It depends on jurisdiction and specific tax laws.

Who can claim shares in transmission?

Legal heirs or appointed representatives.

What role do lawyers play in transmission of shares?

They help navigate legal complexities and validate entitlement.

What's the impact of transfer of shares on company ownership?

It can change the ownership structure based on the shareholder's decision.

How does transmission of shares affect company ownership?

It maintains continuity of ownership through legal succession.

What happens to dividends in transmission of shares?

They are typically transferred to the legal heirs or representatives.

Can transfer of shares be done between strangers?

Yes, if all legal requirements are met.

Is it necessary to notify the company about transmission of shares?

Yes, for updating company records and shareholder register.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.

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