When a shareholder dies, the shares or other securities held in their name do not move to another person through an ordinary sale or transfer. Instead, the change in ownership records is generally carried out through transmission of securities.
The process can be relatively straightforward where a valid nominee is registered and there is no dispute. It can become more complex where there is no nomination, multiple legal heirs are involved, physical share certificates are held, securities have already been transferred to the Investor Education and Protection Fund (IEPF), or family members disagree about succession.
One of the most important points is that a nominee does not automatically become the absolute beneficial owner of the deceased shareholder's securities merely because a nomination exists.
The nominee may receive the securities through the transmission mechanism, but the ultimate entitlement to the securities can still depend on a valid will, applicable succession law, a family settlement, succession certificate, probate, letters of administration, court decree or another legally recognised basis.
SEBI has also revised the operational framework governing transmission of securities. Its circular was issued on 23 July 2026, and the revised framework is effective from 22 August 2026, 30 days after issuance.
Quick Summary
| Situation | Usual Route |
|---|---|
| Registered nominee exists | Nominee transmission |
| No nominee is registered | Legal-heir or claimant transmission |
| Securities are in demat form | Transmission through the applicable DP, depository or processing entity |
| Securities are in physical form | Transmission followed by dematerialisation or direct demat credit under the revised framework |
| Shares have already moved to IEPF | IEPF refund or recovery process is additionally required |
| Heirs or claimants dispute ownership | Succession or court proceedings may be necessary |
The exact documents and procedure are not identical in every case.
They can vary according to:
- whether the securities are held in physical or dematerialised form;
- the value of the securities;
- whether a nomination exists;
- the number of nominees or legal heirs;
- whether the deceased left a valid will;
- whether all heirs agree on the claim;
- whether securities are with the company/RTA, depository system or IEPF; and
- whether there is any litigation, competing claim or inheritance dispute.
What Is Transmission of Shares?
Transmission is the legal process through which securities are moved after events such as the death of a shareholder.
Unlike a normal transfer, transmission generally does not arise from a sale between two people. It occurs because rights in the securities need to be recognised following the death of the registered holder.
Depending on the circumstances, the claimant may be:
- a registered nominee;
- a legal heir;
- a beneficiary or legatee under a will;
- an executor or administrator of the estate; or
- another person whose right has been established through an appropriate court or succession document.
The processing entity may be a listed company, Registrar and Share Transfer Agent (RTA), Depository, Depository Participant (DP), or Asset Management Company, depending on the security and manner in which it is held.
Nominee vs Legal Heir: Who Actually Owns the Shares?
This is one of the most important distinctions in a transmission case.
A nominee is a person registered by the security holder to facilitate receipt and administration of securities after the holder's death.
A legal heir or beneficiary, on the other hand, derives inheritance rights from the applicable law of succession or from a legally valid testamentary instrument such as a will.
A Nominee Is Not Automatically the Absolute Owner
Section 72 of the Companies Act, 2013 provides the statutory facility for nomination and uses the concept of securities vesting in the nominee after the holder's death.
However, the Supreme Court examined the legal effect of nomination in Shakti Yezdani & Anr. v. Jayanand Jayant Salgaonkar & Ors., Civil Appeal No. 7107 of 2017, judgment dated 14 December 2023.
The Court held, in substance, that nomination does not create an independent or third mode of succession and does not override succession law. A nominee does not acquire absolute beneficial ownership merely by virtue of nomination.
Therefore, securities may initially be transmitted to a nominee for operational purposes, while their ultimate beneficial ownership may still have to be determined according to succession law.
This can depend on:
- a valid will;
- intestate succession law where there is no will;
- a legally binding family settlement;
- a succession certificate;
- probate of a will, where applicable;
- letters of administration;
- a court decree or order; or
- another legally valid determination of succession rights.
Example
Suppose a shareholder nominates one child for a demat account but later leaves a legally valid will distributing the relevant estate differently.
The existence of the nomination does not, by itself, eliminate inheritance rights arising under applicable succession law or valid testamentary arrangements. Where entitlement is disputed, the issue may ultimately require legal or judicial determination.
What Did the Supreme Court Decide in Shakti Yezdani?
In Shakti Yezdani v. Jayanand Jayant Salgaonkar, the Supreme Court considered whether nomination under company and depository law gave a nominee beneficial ownership of securities to the exclusion of lawful successors.
The Court rejected the proposition that nomination creates a separate form of inheritance.
The judgment makes three principles particularly important for investors and families:
- Nomination facilitates dealing with securities after death.
- Nomination does not automatically confer absolute beneficial ownership on the nominee.
- Succession law continues to determine ultimate inheritance rights.
The Supreme Court therefore distinguished the operational role of nomination from the substantive law of succession.
This is why families should not assume that simply having one's name registered as nominee conclusively settles inheritance.
SEBI's Nominee-to-Legal-Heir Framework from 1 January 2026
SEBI issued a separate circular on 19 September 2025, titled:
“Ease of doing investment - Smooth transmission of securities from Nominee to Legal Heir.”
The circular states that the nominee acts as a trustee of the securities of the original security holder and transfers the securities to the legal heir in accordance with the succession plan.
The circular introduced a standard reporting reason code, “TLH” — Transmission to Legal Heirs, to address reporting and taxation issues when securities move from a nominee to legal heirs.
This mechanism became applicable from 1 January 2026.
Importantly, this SEBI framework does not decide who the legal heir is.
Determination of legal-heir or succession rights remains governed by applicable succession law, wills, succession documentation, family arrangements and, where necessary, judicial proceedings.
The SEBI framework primarily facilitates the securities-market process once the relevant entitlement has been established.
SEBI's Revised Transmission Framework Effective 22 August 2026
SEBI issued another circular on 23 July 2026 titled:
“Ease of Doing Investment and Ease of Doing Business - Simplification and standardisation of the framework for transmission of securities.”
The circular provides that the revised framework and model forms come into force 30 days from the date of issuance. Accordingly, the revised framework is effective from 22 August 2026.
Among other changes, the revised framework:
- standardises transmission documentation;
- introduces Quick Transmission Processing (QTP) for specified low-value claims;
- revises thresholds for simplified documentation;
- introduces standard transmission forms;
- provides for a combined affidavit-cum-NOC in relevant legal-heir cases;
- removes a universal mandatory requirement for probate of a will;
- recognises additional methods of verifying death certificates; and
- introduces a defined processing timeline for complete transmission claims.
The requirements still differ according to the facts of each case.
1. Nominee Transmission
Where the deceased security holder had registered a valid nominee, the nominee can apply for transmission.
Under the revised SEBI framework effective 22 August 2026, documents for a nominee transmission may include, as applicable:
- the prescribed Transmission Request Form;
- the latest Client Master List (CML) of the nominee's demat account;
- a verifiable death certificate; and
- the original security certificate or a copy of the Statement of Account, depending on how the securities are held.
Other KYC or supporting information may be applicable according to the security and claimant.
The important legal distinction remains that transmission to the nominee does not necessarily determine ultimate inheritance ownership. The nominee may receive or hold securities for purposes of the transmission mechanism while succession rights remain subject to applicable law.
2. Legal-Heir Transmission Where There Is No Nominee
Where no valid nomination exists, the securities may need to be transmitted directly to one or more legal heirs or other legally entitled claimants.
The documents required depend substantially on:
- the value of the claim;
- the type of holding;
- the relationship of the claimant to the deceased;
- the number of legal heirs;
- whether all heirs consent;
- whether there is a will;
- whether appropriate succession documentation already exists; and
- whether the claim is disputed.
Common documents can include:
- Transmission Request Form;
- latest Client Master List;
- death certificate;
- original physical share certificate, where applicable;
- Statement of Account, where applicable;
- PAN;
- identity and address/KYC documents;
- proof of relationship;
- indemnity documents;
- affidavit-cum-NOC from other legal heirs;
- family settlement deed;
- legal-heirship certificate;
- succession certificate;
- probate of a will;
- letters of administration; or
- court decree or order.
This is not a single mandatory checklist for every transmission case.
A straightforward uncontested low-value claim may require significantly less documentation than a high-value estate involving several heirs.
3. Transmission of Demat Shares
Where securities are already in dematerialised form, transmission is processed within the depository system through the applicable DP, depository or other processing entity.
A claimant generally needs an appropriate demat account into which the securities can be credited.
Depending on the case, documentation may include:
- Transmission Request Form;
- Client Master List of the claimant's or nominee's demat account;
- death certificate;
- PAN/KYC information;
- succession-related documents where there is no nominee; and
- additional documents depending on claim value and legal circumstances.
If there are multiple nominees or legal heirs, additional declarations, consent documents or succession evidence may become necessary depending on the case.
4. Transmission of Physical Shares
Physical-share transmission requires separate attention because original share certificates and old folio records may be involved.
Common issues include:
- missing original certificates;
- old addresses;
- name or signature mismatches;
- outdated KYC;
- deceased joint holders;
- multiple legal heirs;
- certificates containing old company names; or
- shares that have subsequently been transferred to IEPF.
Where original physical certificates exist, they can be relevant transmission documents.
Under SEBI's revised framework effective 22 August 2026, once a physical-security transmission request has been verified and processed, the processing entity is required to initiate the demat conversion process for direct credit of securities to the relevant demat account.
Consequently, claimants dealing with old physical holdings should generally ensure that they have an appropriate demat account and accurate Client Master List.
Where the original share certificate itself is missing, the matter may involve a duplicate-cum-transmission process rather than an ordinary transmission alone.
6. Disputed Inheritance Claims
An uncontested transmission claim and an inheritance dispute are very different matters.
SEBI's revised transmission framework does not apply in the ordinary manner where there is a dispute or where there are contesting or competing claims.
Examples may include:
- two or more heirs claiming exclusive ownership;
- allegations that a will is invalid or forged;
- disagreement over a family settlement;
- disputes between a nominee and beneficiaries under a will;
- rival succession certificates or court proceedings; or
- challenges to the claimant's status as a legal heir.
Such matters may need to be resolved through appropriate legal or judicial proceedings before the processing entity can safely recognise the transmission.
An RTA, DP or depository is not a substitute for a succession court, and SEBI's operational framework itself does not adjudicate who should inherit a deceased person's estate.
Documents Required: Why There Is No Universal Checklist
A common mistake is to assume that every nominee or legal heir must submit the same documents.
That is not correct. The appropriate document set depends on the particular category of the claim.
Core Transmission Documents
- Transmission Request Form;
- death certificate;
- Client Master List for demat credit;
- original share certificate for physical securities;
- Statement of Account, where applicable.
KYC Documents
- PAN;
- identity proof;
- address proof;
- claimant KYC documentation.
Succession-Related Documents
Depending on the circumstances, these may include:
- proof of relationship;
- legal-heirship certificate;
- family settlement;
- affidavit-cum-NOC;
- indemnity bond;
- will;
- succession certificate;
- probate;
- letters of administration; or
- court order or decree.
Not every claimant needs every document listed above.
How the Process Usually Works
Step 1: Identify All Securities
Determine:
- company or fund name;
- folio number or DP ID/Client ID;
- number of securities;
- physical or demat status;
- whether there is a registered nominee; and
- whether the securities have already been transferred to IEPF.
Step 2: Check Nomination Status
Confirm whether the deceased registered:
- no nominee;
- one nominee; or
- multiple nominees.
Do not assume that being named as nominee automatically settles beneficial ownership.
Step 3: Identify the Applicable Claimant
Depending on the situation, the claimant could be:
- nominee;
- legal heir;
- beneficiary under a will;
- executor;
- administrator; or
- person recognised by a competent court.
Step 4: Determine the Applicable Transmission Category
The requirements can depend on whether the claim falls under:
- nominee transmission;
- Quick Transmission Processing (QTP);
- simplified documentation;
- above-threshold transmission;
- physical securities;
- demat securities;
- IEPF holdings; or
- succession litigation.
Step 5: Prepare Only the Documents Applicable to the Case
Obtain the appropriate form and checklist directly from the relevant RTA, company, DP, depository or AMC.
This avoids unnecessary documents and reduces the risk of submitting an incomplete claim.
Step 6: Resolve Discrepancies Before Submission
Check for differences involving:
- shareholder name;
- claimant name;
- PAN;
- address;
- folio details;
- demat details;
- death certificate;
- signatures; and
- succession documents.
Record mismatches frequently lead to additional queries.
Step 7: Submit and Retain Acknowledgement
Under the revised SEBI framework, processing entities are expected to acknowledge receipt and identify missing, incomplete or incorrect documents.
Claimants should preserve acknowledgements and correspondence.
Step 8: Track Transmission or IEPF Recovery
For physical holdings, successful transmission may also involve direct dematerialisation.
Where shares are already with IEPF, transmission-related verification must be coordinated with the separate IEPF refund process.
How Long Does Share Transmission Take?
Under SEBI's revised framework effective 22 August 2026, a processing entity is required to process a transmission case within a period not exceeding 21 calendar days from receipt of all required documents associated with the claim.
The 21-calendar-day period should therefore not be interpreted as automatically starting when an incomplete application is first sent.
Delays can occur where:
- required documents are missing;
- forms are incomplete;
- PAN/KYC details do not match;
- folio or demat records contain discrepancies;
- succession documents require clarification;
- original certificates are unavailable;
- the claim involves IEPF;
- additional documents are legitimately required for an above-threshold case; or
- competing heirs or inheritance disputes exist.
Where a transmission claim is not settled within the prescribed timeline or is rejected, the revised framework requires the processing entity to communicate the reasons for the delay or rejection in writing.
Does a Will Override a Share Nomination?
A nomination should not be treated as a substitute for estate planning.
The Supreme Court's decision in Shakti Yezdani confirms that nomination does not create a third line of succession and does not override succession law.
Accordingly, where a valid will governs the relevant securities, the rights arising under that will may be relevant to determining ultimate ownership.
The practical transmission to a nominee and the final beneficial entitlement to the shares are therefore two different legal questions.
Where the nominee and beneficiaries agree, the matter may proceed smoothly. Where they disagree, appropriate succession or court proceedings may become necessary.
Does SEBI Decide Who Is a Legal Heir?
No.
SEBI prescribes securities-market procedures governing how transmission claims should be processed by regulated entities.
It does not itself determine who inherits a deceased investor's estate.
Legal-heir and succession rights arise under applicable succession law, valid testamentary documents and judicial determinations.
The revised SEBI framework also recognises this distinction by excluding disputed or competing inheritance claims from its normal transmission mechanism.
Practical Checklist Before Filing a Transmission Claim
- Identify every company, folio, demat account and investment of the deceased.
- Check whether a valid nominee is registered.
- Confirm whether the holding is physical, demat or SOA.
- Check whether the shares have already been transferred to IEPF.
- Obtain the death certificate.
- Open or verify the claimant's demat account where necessary.
- Obtain the latest Client Master List.
- Check PAN, name, address and KYC consistency.
- Determine whether a will exists.
- Identify all legal heirs where there is no nomination.
- Determine whether the claim is uncontested.
- Obtain succession or court documents only where applicable.
- Use the correct Transmission Request Form for the applicable category.
- Keep copies and acknowledgement of all submissions.
- Resolve any competing inheritance claim before expecting routine transmission processing.
Frequently Asked Questions
Is a nominee the owner of shares after the shareholder dies?
Not automatically. A nominee may receive securities through the transmission mechanism, but the Supreme Court has held that nomination does not confer absolute title or override succession law. Ultimate ownership may depend on a valid will, succession law, family settlement or appropriate succession or court documents.
What happens if there is no nominee?
The legal heir or another legally entitled claimant may apply for transmission. The exact documents depend on the holding type, value, number of heirs and whether the claim is disputed.
Is a succession certificate compulsory for every transmission?
No. It should not be presented as universally compulsory. Applicable documents differ by transmission category and claim circumstances. A succession certificate, probate, letters of administration or court decree may be required or may simplify the claim in particular cases.
Are the documents the same for demat and physical shares?
No. Demat claims involve depository records and Client Master Lists, while physical claims can involve original share certificates and eventual dematerialisation.
What if physical share certificates are lost?
The case may require a duplicate-cum-transmission procedure in addition to establishing transmission rights.
What if the shares have already been transferred to IEPF?
The claimant must follow the IEPF refund or recovery procedure in addition to satisfying the relevant succession and transmission requirements.
How long should transmission take?
Under SEBI's revised framework effective 22 August 2026, a complete transmission claim should be processed within 21 calendar days from receipt of all required documents. Incomplete documents, mismatched records, additional-document requirements or disputes may increase the actual time involved.
What if the nominee and legal heirs disagree?
SEBI's routine transmission framework is not designed to adjudicate competing inheritance claims. Appropriate succession or judicial proceedings may be required.
Key Takeaways
Nomination and inheritance are not the same thing.
A nominee facilitates transmission but is not automatically the absolute beneficial owner of the shares.
Ultimate ownership can depend on:
- a valid will;
- applicable succession law;
- a family settlement;
- succession certificate;
- probate;
- letters of administration; or
- court determination.
SEBI's 19 September 2025 nominee-to-legal-heir framework applies from 1 January 2026, but it does not determine who qualifies as the legal heir.
SEBI's newer transmission circular was issued on 23 July 2026, with the revised framework effective 22 August 2026, 30 days after issuance.
The documents required should always be selected according to the specific transmission scenario rather than relying on one universal checklist.
How Vitta Samadhan Can Assist
Transmission cases can involve several layers — company records, RTA requirements, demat accounts, physical certificates, succession documentation and, in some cases, IEPF recovery.
Vitta Samadhan assists investors, nominees and legal heirs with matters including:
- transmission of shares;
- physical share recovery;
- duplicate share certificates;
- legal-heir and nominee claims;
- IEPF share and dividend recovery;
- unclaimed shares and dividends;
- dematerialisation-related documentation; and
- coordination of investor documentation with companies and RTAs.
Professional assistance can be particularly useful where there are old physical records, several legal heirs, deceased joint holders, discrepancies in investor information or securities already transferred to IEPF.
Official Reference Sources
1. SEBI — Revised Transmission Framework, 23 July 2026
Ease of Doing Investment and Ease of Doing Business - Simplification and standardisation of the framework for transmission of securities
Circular No. HO/38/13/11(14)2026-MIRSD-POD/I/17111/2026
Revised framework effective 22 August 2026, 30 days after issuance.
2. SEBI — Nominee to Legal Heir, 19 September 2025
Ease of doing investment - Smooth transmission of securities from Nominee to Legal Heir
Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/130
Effective: 1 January 2026
3. Supreme Court of India — Shakti Yezdani
Shakti Yezdani & Anr. v. Jayanand Jayant Salgaonkar & Ors.
Civil Appeal No. 7107 of 2017
2023 INSC 1076
Judgment dated 14 December 2023
Verification note: Re-check the official sources above on the actual publication date. Add or update the final “Last verified” date only after that publication-date verification has been completed.
Conclusion
Nominee share transmission should not be confused with final inheritance ownership. A nominee may receive securities through the transmission mechanism, but the legal entitlement to those securities can still depend on succession law, a valid will, family settlement or an appropriate court or succession document.
Investors and families should also distinguish between nominee transmission, legal-heir transmission, demat and physical holdings, IEPF recovery and disputed succession matters because each route can involve different documentation.
SEBI's revised transmission framework becomes effective on 22 August 2026. Claimants filing on or after that date should follow the applicable revised forms, documentation requirements and processing framework.
Disclaimer
This article is intended for general informational and educational purposes only. Transmission and succession requirements depend on the facts of each case, applicable securities regulations, succession laws, company/RTA/depository procedures and judicial orders. It should not be treated as legal, tax or investment advice. Claimants dealing with disputed inheritance, substantial estates or complex succession issues should obtain appropriate professional advice.