How a woman can transfer shares to her son on dissolution of HUF
The following article was first published in the Mint newspaper on 21st July, 2022. The same was written by our Private Client team at Cyril Amarchand Mangaldas, who frequently publish their comments and opinions in the Mint. The online version of the article can be found here.
What are the steps that a woman needs to take to transfer shares to her son upon the dissolution of a HUF (Hindu undivided family)?
—Name withheld on request
The query infers that the HUF is proposed to be dissolved and subsequently some equity shares held by the HUF are to be distributed/ transferred to the son, who is a coparcener of the HUF.
It is important to note that dissolution of HUF can happen after partition of properties of the HUF. In order to give effect to a partition of an HUF, a deed of partition recording the entitlement of each coparcener of the HUF in the HUF properties/ assets is required to be executed by all the existing coparceners of the HUF.
Therefore, in this case, a deed of partition recording the son’s entitlement to such shares should be executed and then such shares held by the HUF should be distributed/ transferred to the son.
My father, who was the karta of our HUF account died one month ago. Now, I want to continue with the same account by changing the name of karta, but the bank refuses, saying that account has deposit of more than ₹1 lakh. Please suggest what I should do next.
—Name withheld on request
Your query infers that you are the eldest coparcener of your father’s HUF. Upon the death of a karta, the eldest coparcener can become the karta, post which the bank’s records can be updated. Here, the banks ask for a copy of the death certificate and the consent / no-objection of the other coparceners of the HUF in the format prescribed by them.
Upon submission of these documents, the banks update the name and signature of the karta in their records which enables continuity and operational ease of the same bank account of an HUF.
The amounts lying in the HUF’s bank account should not be critical for such change of name. If you have complied with the above (i.e. provided the consent/ no-objection of other coparceners) but the bank is refusing to change the name of karta, we recommend that you initiate formal correspondence with the bank to understand the compliance requirements and accordingly comply with the same.