Question

Ram Lal is a shareholder of a company holding 100 shares. Ram Lal dies leaving Rohan as his legal representative but is not a member of the company. Rohan transfers all 100 shares of the deceased to Anil. Is the transfer valid? Test the authenticity of Rohan’s action stating reasons.​

Answer 1

Answer:

no the transfer is not valid

Answer 2

Ram Lal owning 100 shares in a company, passes away assigning Rohan who is not a member of the company as his legal representative and Rohan transfers all these shares of Ram Lal to Anil. Since Rohan is the legal representative of the deceased shareholder and as specifically permitted under Section 56(5) of the Company’s Act 2013, the legal representative of a deceased shareholder can directly transfer shares of the deceased to a third party instead of getting transmitted in own name.