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Q&A on the Transmission of Shares in Malaysia

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Q: What is transmission of shares in Malaysia?
A: Transmission of shares refers to the automatic transfer of ownership of shares from one individual to another by operation of law without any exchange of value.

Q: Why are the differences between a transfer and transmission of  shares?
A:
  1. A transfer of shares involves a voluntary decision by the shareholder through a contractual agreement and/or the completion of a properly executed and stamped transfer documents.  
  2. The transmission of shares occurs automatically by legal operation to a designated individual upon the happening of a legally significant event, such as the shareholder's mental or physical incapacity, death or bankruptcy.

Q: What are the stages of shares transmission in Malaysia?
A: The company must first be informed of the shareholder’s passing or any other relevant circumstances, usually by providing sufficient evidence. The company will then register the transmission of shares in the names of the legal heir or nominee.

Q: What are the methods of shares transmission in Malaysia?  
A:
  1. Transmission by nomination
    If the shareholder had nominated a person to receive the shares, the shares will then be registered in the nominee’s name.

  2. Transmission by succession
    If the deceased shareholder fails to nominate a recipient for the shares, the legal successors must secure a succession certificate or probate grant from the court. These documents grant authority to the legal heirs to transmit the shares into their names.

Q: What are the documents required for the transmission of shares?
A: To transfer ownership after death, death certificate, nomination form, grant of probate or letters of administration are required. For transfers due to bankruptcy or incapacity of the shareholder, official court or authority documents verifying bankruptcy or incapacity status are necessary.

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