Transferring the shares and interests of a deceased member in a society to a nominee is a crucial process that involves legal and procedural steps to ensure a smooth transition of ownership. When a member of a society passes away, it becomes imperative to honor their wishes and properly transfer their assets to the designated nominee. This blog aims to provide a comprehensive guide on navigating this process, shedding light on the legal aspects, required documentation, and the essential steps involved in transferring shares and interests from the deceased member to the nominee. Understanding this process is essential for both the society and the nominee to preserve the member’s legacy and uphold legal obligations.
HOW TO TRANSFER SHARES AND INTEREST OF THE DECEASED MEMBER IN THE CAPITAL/PROPERTY OF THE SOCIETY TO THE NOMINEE/NOMINEES
Upon the demise of a member, in accordance with Section 30 of the MCS Act, 1960, and as stipulated in bye-law No. 17A or 19, the society is obligated to transfer the shares and interest of the deceased member in the society’s capital or property to the designated nominee(s). The transfer shall be proportionate to the shares and interest previously held by the deceased member, especially in cases where the property was acquired jointly by the member and an associate.
In the unfortunate event of a member’s passing, the nominee(s) are required to submit an Application for Membership within six months from the date of the member’s demise. If there is more than one nominee, a joint application should be made to the society, specifying the nominee to be enrolled as a member. The remaining nominees shall be enrolled as joint or associate members unless they indicate a different preference.
Furthermore, the nominees must furnish an Indemnity Bond in the prescribed format, absolving the society from any claims pertaining to the shares and interest of the deceased member in the society’s capital or property. This indemnification is crucial, particularly when only one nominee is identified for membership within the society.
HOW TO TRANSFER SHARES AND INTEREST OF THE DECEASED MEMBER IN THE CAPITAL/PROPERTY OF THE SOCIETY TO THE HEIR
In the event of a member’s demise without a designated nominee, or if no nominee steps forward for the transfer, the society will facilitate the transfer of the deceased member’s shares and interest in the society’s capital or property to the rightful heir.
Within six months of receiving information about the member’s passing, the society will call for claims or objections regarding the proposed transfer. This call will be made through a public notice displayed in the prescribed format on the society’s notice board and published in at least two widely circulated local newspapers. The costs of this publication will be recoverable from the value of the deceased member’s shares and interest in the society.
After careful consideration of the received claims or objections and conducting necessary inquiries, the committee will ascertain the person they deem to be the rightful heir or legal representative of the deceased member. This individual is eligible for membership in the society, subject to the provisions outlined in bye-laws Nos. 17(a) or 19. To formalize their membership application, the heir or representative must submit an Indemnity Bond in the prescribed format, absolving the society from future claims to the deceased member’s shares and interest in the society’s capital or property.
In cases where there are multiple claimants, an affidavit will be required to determine the eligible member for the society. The named individual in the affidavit will then provide the necessary indemnity bond along with their membership application. However, if the committee cannot determine the rightful heir or if claimants cannot reach an agreement, the committee will request the production of a succession certificate from the Competent Court.
In the absence of any claimant, the shares and interest of the deceased member in the society’s capital or property shall be vested in the society.
In the realm of cooperative societies, the transition of shares and interests from a deceased member to a nominee is a significant responsibility. By meticulously adhering to legal frameworks and following established procedures, the society ensures a seamless transfer that respects the wishes of the departed member. Equally important is the role of the nominee, who must fulfill necessary formalities and provide essential documentation to complete the transfer. Through understanding and cooperation between all parties involved, the society can uphold its integrity and uphold the legacy of the deceased member, making the transition as smooth and respectful as possible. The proper transfer of shares and interests is not only a legal necessity but also a gesture of honoring a member’s contribution and ensuring the stability and continuity of the cooperative society.