Nomination Vs. Succession - Dispute Regarding Mode of Inheritance of Shares

Ananiyasri R

doi:10.36948/ijfmr.2023.v05i06.10336

Nomination Vs. Succession - Dispute Regarding Mode of Inheritance of Shares

Author(s)	Ananiyasri R
Country	India
Abstract	A company is said to have perpetual succession, meaning that a company continues to function for time immemorial and its working would not be affected by any change in membership, death of the owner or insolvency. Collaborating with the same thoughts, the shares of a company will also not have any expiry period insofar as the company remains to be a publicly listed entity. However, the current fad of trading in the open market depicts shares as a movable property that may be transferred from one person to another. Section 44 of the Companies Act, 2013 agrees that "the shares or debentures or other interest of any member in a company shall be movable property and transferable in the manner provided by the articles of the company. The Act legalizes the act of transferring shares in cases of them being bought, or sold in general. However, considering that shares and debentures are movable property, they can be considered familial property that can be inherited by one’s children. The problem of inheriting shares and debentures arises due to the mode by which the parent/guardian chooses to transfer his shares. Section 109A discusses the mode of Nomination of shares where a holder may nominate a person to whom his shares can be vested after his death. However, the problem arises when the person has stated in his will that particular people in his family will inherit his property and the shares under his name are also included as transferable property under his will. This paper will delve, into these modes of transfer of shares and which one will prevail over the other.
Keywords	Nomination, Succession, The Companies Act, Testamentary, Nominee, Legal Heir
Field	Sociology > Administration / Law / Management
Published In	Volume 5, Issue 6, November-December 2023
Published On	2023-12-14
Cite This	Nomination Vs. Succession - Dispute Regarding Mode of Inheritance of Shares - Ananiyasri R - IJFMR Volume 5, Issue 6, November-December 2023. DOI 10.36948/ijfmr.2023.v05i06.10336
DOI	https://doi.org/10.36948/ijfmr.2023.v05i06.10336
Short DOI	https://doi.org/gs84bb

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Nomination Vs. Succession - Dispute Regarding Mode of Inheritance of Shares

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