Inheritance of shares is an important aspect of company law, especially when it comes to succession planning for businesses. In Bangladesh, the inheritance of shares of companies is governed by the Company Act, 1994. In this article, we will provide an overview of share inheritance under the Company Act, 1994 in Bangladesh.
According to the Company Act, 1994, shares in a company are movable property, and they can be inherited like any other movable property. When a shareholder passes away, their shares in the company can be inherited by their legal heirs. However, certain conditions need to be met for the legal heirs to inherit the shares.
Firstly, the legal heirs must have a legal right to inherit the shares. This means that they must be the rightful heirs of the deceased shareholder under the law of succession in Bangladesh.
Secondly, the legal heirs must notify the company of the death of the shareholder and provide proof of their legal right to inherit the shares. This notification should be made within 30 days of the death of the shareholder.
Thirdly, the legal heirs must apply for the transfer of the shares in their name. This application should be made within 90 days of the death of the shareholder. The application should include the following information:
Details of the deceased shareholder, including their name, address, and shareholder identification number.
Details of the legal heirs, including their names, addresses, and proof of legal inheritance.
Details of the shares being inherited, including the share certificate number and the number of shares.
Once the company receives the application for transfer of shares, they will verify the information and transfer the shares in the name of the legal heirs. The legal heirs will then become the shareholders of the company and will have all the rights and privileges that come with share ownership.
It is important to note that the transfer of shares is subject to any restrictions or conditions mentioned in the company's articles of association. For example, the articles of association may restrict the transfer of shares to certain persons or require the approval of the board of directors for the transfer of shares.
In conclusion, share inheritance is an important aspect of company law in Bangladesh. The Company Act, 1994 provides a framework for the transfer of shares to legal heirs of deceased shareholders. It is important for businesses and shareholders to be aware of the legal requirements for share inheritance to ensure smooth succession planning and compliance with company law.
At OG Accountants, we offer comprehensive company law consulting services to help businesses navigate the complexities of company law in Bangladesh. Contact us today to learn more about how we can help you with your company law compliance and management needs.