Shares held by deceased shareholders (Part 2)
How Are the Shares Processed?
- The process begins only after the Legal Representative has obtained the required legal documents
Share Processing Procedure
1. Submit the Legal Documents
- The Legal Representative submits:
- Grant of Probate (with a will)
- or Letter of Administration (without a will)
- To the company
2. Transmission of Shares
- The company transfers the deceased shareholder's shares
- To the Legal Representative through Transmission
- This is not a Share Transfer
3. Distribution to the Beneficiaries
- The Legal Representative then distributes the shares
- According to:
- The will
- Or the applicable legal process
What If the Shares Are Jointly Held?
- If the shares are held under Joint Shareholding
- Upon the death of one shareholder:
- The shares do not form part of the estate
- They do not pass to the Legal Representative
- They automatically pass to the surviving joint shareholder
- This is known as the:
- Right of Survivorship
Key Features of Joint Shareholding
- No estate administration is required
- No Transmission procedure is required
- No Legal Representative is involved
- The surviving joint shareholder automatically becomes the owner of the shares
Summary
- A Next of Kin is only a family member and has no authority to deal with the shares
- Only the Legal Representative may administer a deceased shareholder's shares
- The shares must first be transferred by Transmission before being distributed to the beneficiaries
- Joint Shareholdings are an exception, as ownership automatically passes to the surviving joint shareholder under the Right of Survivorship