Ownership of shares is perhaps the most important form of investment wherein an investor becomes a shareholder in the growth of a company. However, life tends to bring about changes in the details of such shares, even names on share certificates. Whether resulting from marriage, divorce, deaths of shareholders, or even errors in documents, updating or deleting names on shares is one of the most crucial processes of verifying the right ownership as well as easy transactions for anyone holding shares. In case they fail to update or delete these names at the right time, they are likely to encounter several problems while claiming dividends, selling shares, or transferring ownership, among others. To continue having the smoothest management of your investments, you need to understand how a name deletion in share certificates takes place.
Scenarios in Which Deletion/Updation in Shares is Needed
Name deletion in share certificates is necessitated through various personal or legal events. One of the most common reasons is the death of a shareholder. In that case, the legal heirs or nominees must ensure that the deceased’s name has been removed from shareholding records and shares are transferred to the rightful owner. This process is referred to as the transmission of shares, and confirming the legal claim, requires a certain set of legal documents, such as the death certificate and succession certificate.
Marriage is another event of name updating in shared books; even most women update their names after marriage. Hence, it is essential to confirm that the name used at all official places will remain the same so that there is no further dispute or problem. Equally, after divorce, a person may also exercise his or her name restored to his or her maiden name, which can require some name updating in the shares book.
Further, sometimes the share certificate had errors at the point of issue; for example, a misspelled name or incorrect information. Whichever is the ground for name deletion or update, immediate action means getting the shares correctly spelt in the right name.
Documents Required for Name Deletion/Updation in Shares
This process requires you to be prepared with relevant documents. The document to be produced depends on the name change type. For instance, in the case of marriage or divorce, one is required to present a marriage certificate or a divorce decree, where the document usually refers to a change in name.
The process becomes complex when there’s the death of a shareholder. For this, besides the death certificate, a certified copy should be presented with legal documents like a succession certificate, probate of will, or letter of administration, depending on the case.
For name changes due to an error in the share certificate, shareholders would be asked for documentary evidence of his correct name as copies of his PAN card, Aadhar card, or passport.
Further, the shareholders are required to apply formally to the company or its RTA for the change. The application would need all the details of the shares and the folio number along with the reason for the deletion or rectification of the name along with supporting documents.
The Procedure for Name Deletion/Updation in Shares
In practice, registering a name update or deletion on share certificates involves a step-by-step sequence in such a way that it cannot be delayed, or even worse, rejected. The first step is to request the right form from the company or its RTA, which one would subsequently use formally to request such a change. This would ask for information related to the shares, namely, their folio number, the name of the existing shareholder, and the nature of the request—whether it’s for the deletion of a name or an update.
Then there are the annexures of documents required to fill out this form, as discussed in the earlier part of the discussion. The company guidelines are that all such documents should be either certified copies or originals. Let us take the example of shareholder death settlement. In this kind of case, it is necessary to attach the death certificate, the legal heir certificate, or even probate documents if the above-mentioned documents are not available.
Immediately after the application and accompanying documents are submitted to the RTA or company, comes the verification process. The company scrutinizes the documents submitted and ensures that they are in order before commencing the process of changing the name. As a rule, this process takes a couple of weeks to several months, considering the complexity of the case and the depth of involvement of the documentation.
Once verified, the company will update its records, and a new share certificate will be issued in the name of the new or updated shareholder. I would, however, mention here that the number of days it would take to complete this process depends wholly on the company’s procedure and the nature of the change of name requested. So, to avoid any delay, shareholders need to keep all documents ready.
Conclusion
Updating the shares by name deletion in share certificates is an important exercise not to be ignored. This happens due to changes in personal circumstances like marriage and divorce or even the death of the shareholder. To ensure the smooth handling of finance, it is always easy to properly update shareholding records. Though this appears to be complex and time-consuming, it can easily become less cumbersome with the right guidance and documentation. Shares Recover provides support for investors as well as legal heirs in erasing or updating the names in the course of doing so.
FAQs
1. Can I change my name on shares multiple times?
Yes, the name on shares can be changed multiple times, but every time a new application along with documentation is made compulsory. All those name changes must be preserved so that they can be referred to later at a stage.
2. What happens if there is a discrepancy between the name on the share certificate and other official documents?
Differences can lead to issues, such as problems in collecting dividends or selling shares. One must update the name in the share certificate to the other important documents.
3. Can I change my name on shares if I am a minor?
The answer is yes, but you would require the consent of your legal guardian or parent. Whatever the formality, which might differ from place to place.
4. What if I cannot locate the original share certificate?
If there have been misplaced original share certificates, then you will have to produce additional documentation to prove ownership of shares, including any evidence of the share purchase agreement or bank statement. You may request from the company, RTA, or other respective authorities as to what will be required in that case.
5. Can I change my name on shares if I am a joint shareholder?
Yes, your name can be changed on shares if you are one of the joint shareholders. However, both the joint shareholders have to concur with that change and then present the same before the concerned authorities.
