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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.

WRITTEN BY

For further information, please contact:

Rishabh Shroff – Cyril Amarchand Mangaldas,
rishabh.shroff@cyrilshroff.com

Rishabh is Co-Head of the Private Client practice and Head of International Business Development at the Firm, specialising in family constitutions and settlements, trusts, wills and succession planning.

Rishabh Shroff is a Partner in Cyril Amarchand Mangaldas, and operates out of the Mumbai office. After completing his LL.B from the London School of Economics, London, he joined the Firm in September 2007. He was admitted as an advocate in the Bar Council of Maharashtra & Goa (India) in 2007. He is also a Solicitor, Supreme Court of England & Wales.

Private Client Experience

Rishabh is the Co-Head of the Private Client practice at the Firm, specialising in family constitutions and settlements, trusts, wills and succession planning. He provides succession, taxation, estate and wealth planning advice to wealthy individuals and their families, who are often promoters of large family businesses. He also provides related advice to trustees and other private client service providers, such as family offices and institutional / corporate trustees.

Rishabh advises on a number of issues, including the creation and management of domestic trusts, along with advising both trustees and beneficiaries in relation to their relative rights, responsibilities and obligations. He is experienced in the drafting and creation of inter-vivos trusts and their constitutional mechanisms, and has experience in dealing with complex issues such as settler reserved powers, protector powers and appointment mechanisms. He also frequently advises on complex issues arising under the Indian exchange control regime (including in respect of Non Resident Indians and foreign trusts and companies), SEBI Takeover Regulations and the SEBI Listing Agreement, etc.

Rishabh is involved in the setting up and administration of a number of bespoke private trust companies in India. He also advises on a number of charitable and philanthropic endeavours, including on India’s statutory Corporate Social Responsibility regime.

Rishabh was featured in detail in a landmark publication on family business and the next generation of corporate India, “The Inheritors: Stories of Entrepreneurship and Success” by Sonu Bhasin (Penguin Books, November 2017)2. The said book talks about his journey in his own business, and how those personal experiences have helped him better understand the dynamics between family & business.

Japan Desk & Corporate Experience

Rishabh is a Partner in the Firm’s Corporate team, specialising in foreign investments into India, private mergers & acquisitions and joint venture transactions. He had also worked in the Firm’s Projects & Projects Finance (infrastructure) team for two years (2007 – 2009).

Rishabh is the Co-Head of the Firm’s Japan Desk, and works with Japanese clients frequently. He has been a part of the Japan Desk for over 13+ years, and during this time has advised a number of leading Japanese and international companies on their investments into India. He is responsible for managing the Indo-Japanese transactions handled by the Firm, and for building and maintaining relationships with its clients in Japan. He regularly travels to Japan for speaking and participating in various India focused seminars.

Rishabh had worked for three months in Homburger AG (Zurich) in 2008 as part of a Secondment Program between the Firm and Homburger AG. He was also seconded to Withers LLP (London) in August 2013 for four months, and to Cravath, Swaine & Moore LLP (New York) in July 2007 for five months.

WWF India

Rishabh is the Philanthropy Ambassador for WWF India. As an active philanthropist and someone who is deeply concerned about the environment, Rishabh works closely with WWF India on various policies, initiatives and activities through the year, including on matters of environmental policies and changes.

Rishabh is a keen writer, and hopes to release a number of publications in the area of Private Client law in the near future. When he is not writing, Rishabh can be found reading, travelling extensively, playing the piano or playing badminton.

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