How Shares are Transferred if Account Holder Dies Without Appointing Nominee

Most investors who begin investing in the shares of a company do so without planning into the future. The share market, in specific, is a very volatile market. Keeping up to date with how the economy and its regulations have affected a company’s shares are important. This requires keeping up to date with everyday news rather than planning ahead in the future. As a result of this, most investors do not account for situations that relate to their death and how it affects their shares. In this article, we explain what exactly happens if an account holder dies without appointing a nominee.

General Process- A Brief Outlook

It is up to the account holder of a demat account to decide whether they wish to hold their account alone or share it with someone else (joint account). In a situation where the account holder passes away, the rules of transmission are applied. The joint holder of the demat account or the heirs of the account have to approach a depository participant who will then eventually begin the transmission of shares process. A depository participant refers to an agent who acts as the middleman between the account holder and his/ her account. This agent can be a financial institution, bank or a licenced member of the Securities and Exchange Board of India (SEBI). For the transfer of shares to family members to be completed, certain documents need to be filled and submitted to the depository participant. If, however, the shares of the account holder are held in a physical form, each of the companies whose shares are owned by the pertinent account holder need to be approached. It must be borne in mind that it takes about 6 to 12 months to transfer shares from one account to another.

Jointly Held Accounts

Upon the submission of a transmission form, securities belonging to the account holder and transferred to the joint owner of the account. Proof of the death of the account holder in the form of a death certificate must also be submitted. In order to receive the shares, the joint partner must open a separate account through a depository participant so that they have an outlet where they can receive and store their transferred shares. Caution must be taken to ensure that the name of the individual is spelled out the same for both accounts.

Account with Nomination

Similar to the process of a joint account, the nominee of an account must file for the transfer of shares by filling out a form mentioning their details and submitting a certified death document of the deceased holder. The form can be found by approaching the pertinent depository participant or downloading it from the depository participant’s website. Once these documents and its contained information are verified, the transmission of shares begins and is sent to the depository participant account of the nominee.

If there are legal claimants on the shares, then it may be difficult for the nominee to receive these shares. It becomes a matter of legal interest and resolution.

Account without Nomination

When an account lacks a nominee, the transfer of shares process is a little more complex than the straightforward process mentioned above. The bank or financial institution in charge of the transfer of shares has to first review all previously owned documents submitted by the deceased account holder and figure out who is the rightful owner of the shares. This process is time consuming. To complete this process, supplementary documents are sometimes requested for. This process does not exist if the account is jointly held or if the account holder has a nominee. The first document that the depository participant or agent will search for is the will of the deceased holder. Wills provide agents will clear cut rules on how the deceased account holder’s assets are to be treated. If the deceased account holder had prepared a will, the subsequent process is rather simple after a few details are ironed out.

In a situation where there are multiple individuals mentioned in the will of the deceased account holder, sorting out who will receive what percentage of the shares becomes a matter of legal interest. Resolution of this problem requires the court to declare a verdict.

In case the deceased account holder has not prepared a will, the agent requests the individual who approached them to visit the court and apply for a succession certificate which clearly needs to state that the individual is the rightful owner of the shares.

The most convenient and most recommended strategy when such a situation arises is to have an internal discussion amongst all the heirs (if any) of the shares. Discussing what percentage of shares each heir wishes to receive and agreeing upon it prevents a situation of legal disputes from arising. Taking this agreed upon statement to the court for approval is necessary for the successful transmission of shares to the heirs of the deceased account holder. Each legal heir will individually have to present their legal affidavit to the court for approval.

Documentation to be Submitted

The documents that need to be submitted for the transfer of shares to family members vary according to the total amount of the securities at hand.

If the total value of the securities is less than Rs. 5 lakhs, then the legal heir must submit any (or a few) of the following documents:

  • Copy of family settlement deed
  • Death certificate of the deceased account holder
  • Affidavit
  • No objection certificate from every legal heir involved
  • Notarised letter of indemnity
  • If the total value of the securities is more than Rs. 5 lakhs, then the legal heir must submit any (or a few) of the following documents:
  • Copy of the will of the deceased account holder
  • Succession certificate
  • Letter of administration


The transfer of shares process varies significantly depending on what type of an account the deceased account holder held and whether he/ she has any nominees or legal heirs. It also differs based on the total amount of the securities held by the deceased account holder.