Examine the validity of transfer and transmission of shares in favour of a minor under the provisions of the Companies Act, 2013.

The word transfer indicates an act of parties or of the law, by which title to the property is conveyed from one person to another. It is called inter vivos transfer, i.e., between two living persons. Whereas the word transmission is referred to devolution of title by operation of law. It may be by succession or testamentary transfer after the death of the person. Under section 11 of the Indian Contract Act, 1872 only a person who has attained the age of majority is competent to contract, a minor hence is not competent to enter into any contract. Since a minor cannot enter into a contract or agreement except through a guardian, and since no notice can be taken of the fact that the guardian holds a share in trust for a minor, it follows that his name cannot be entered in the Register of Members and therefore, he cannot become a member of a company. There is, however, no objection in law to the guardian of a minor entering into a contract on behalf of a minor, by virtue of the statutory right conferred on him. Since Section 56 of the Companies Act, 2013 enables execution of transfer deed by or on behalf of the transferor or the transferee, the transfer deed can be executed by a minor through his natural guardian as transferee, and the contract so entered into by a minor through his natural guardian is a binding and valid contract. Where the nominee is a minor, the holder of the securities, making the nomination, may appoint a person in Form No. SH. 14, who shall become entitled to the securities of the company, in the event of death of the nominee, during his minority. On death of the shareholder during the minority of the Nominee, the Shares should be transmitted to the Minor under the guardianship as mentioned in the nomination form till the Minor attains majority; however, the beneficial interest will be with the Minor.