On September 3, 2026, Palpa Cement Industries’ share registrar published a short notice. A shareholder in Lalitpur had died in Shrawan 2081 BS (August 2024). His widow had applied to move his one lakh shares, held on an old paper certificate, into her own demat account. Anyone with a competing claim had 35 days to come forward. The notice went out roughly two years after the date of death it listed.
That gap is the whole story of share transmission in Nepal. The law is not especially hard. The paperwork is not especially long. What slows families down is that nobody knew what the person owned, where it was held, or who had to sign. And the most common belief people bring to the process, that a “nominee” simply inherits the shares, is mostly wrong in Nepal’s demat system.
This piece explains what transmission is, how it works through CDSC and your depository participant, what changes when the shares are still on paper, and what you should set up now so your family is not reading a 35-day notice in the newspaper two years after the fact.
Our position up front: in Nepal, the single most useful thing a shareholder can do for their heirs is not to name a nominee. It is to dematerialize everything, keep one written list of holdings, and make sure the family agrees in advance on who gets what. Transmission rewards consensus and punishes surprise.
What share transmission actually means
Transmission is the legal transfer of securities from a person who has died to the people entitled to them. It is different from a transfer, which happens when a living owner sells or gifts shares. Nobody sells anything in a transmission. Ownership moves by operation of law, because the original owner can no longer hold it.
CDS and Clearing Ltd (CDSC), Nepal’s only central depository and a wholly owned subsidiary of NEPSE, defines it plainly in its investor FAQ: transmission is the process by which the securities of a deceased account holder are transferred to the account of their heirs or nominee. The same FAQ draws the distinction that matters most. If the shares are in a demat account, the heirs deal with one office, their depository participant (DP). If the shares are still physical certificates, the heirs must correspond separately with every company in the portfolio.
That one sentence is the difference between a few weeks of paperwork and a few years of chasing registrars.
The nominee myth
Indian depositories have a formal nomination system, and a lot of Nepali investors absorb Indian explainers on YouTube and assume the same thing applies here. Name a nominee, the thinking goes, and the shares pass to that person automatically.
That is not how CDSC describes Nepal’s process. Look at what CDSC’s FAQ asks the claimant to submit for demat transmission: a completed Transmission Request Form (TRF), an attested death registration certificate, the deceased’s citizenship certificate, the heir’s citizenship certificate, an attested relationship certificate (the nata pramanit issued by the ward office), and a consent letter from the other heirs. Everest Bank, which operates as a DP, publishes the identical list.
Read that last item twice. Consent of the other heirs. The person applying does not receive the shares because a form years ago had their name on it. They receive them because the legal heirs agree, in writing, that they should.
This is consistent with how inheritance works under the Muluki Civil Code, 2074, which took effect on Bhadra 1, 2075 BS (August 17, 2018). Without a will, a deceased person’s property goes first to the surviving spouse and children. The demat system follows that law rather than overriding it.
So what is a nominee worth? Where an institution lets you register one, the nominee acts as the person the institution deals with first. That is useful. It tells the DP, the bank or the insurer whom to talk to. But treat it as a convenience, not as a will. If you want one child to receive your shares and the others to receive something else, a nominee field will not do that for you. A valid will, or a lifetime transfer, will.
How demat transmission works, step by step
CDSC’s role in transmission was formalized when the Securities Board of Nepal (SEBON) endorsed the third amendment to the Central Depository Service Bylaws, 2068, as reported by ShareSansar on October 28, 2018. Before that, ShareSansar noted in April 2018, families had to queue at NEPSE itself for ownership changes, a process that typically took between two weeks and two months and often meant traveling to Kathmandu.
Under the amended framework, the process runs through the DP where the deceased held the demat account. Here is the sequence.
- Find the DP. The demat account lives with a specific DP: a bank, a broker, or a merchant bank. The first eight digits of the 16-digit BOID identify the DP, according to CDSC. If the family has an old account statement, a Meroshare login, or a DP passbook, the DP is on it.
- Get the death registration certificate. This comes from the local ward office. Make several attested copies. Every institution will want one.
- Get the relationship certificate (nata pramanit). Also from the ward office. It should list every legal heir, not only the person applying.
- Collect citizenship copies. The deceased’s and every heir’s.
- Get consent letters from the other heirs. If the widow is applying, the children sign consent. If a son is applying, his mother and siblings sign. No consent, no transmission through this route.
- Submit the Transmission Request Form to the DP. The DP checks the documents, enters the application into CDSC’s system, and forwards it to CDSC.
- CDSC verifies and publishes a claim notice. According to ShareSansar’s report on the bylaw amendment, CDSC publishes a notice giving any other claimant 35 days to come forward.
- Shares move to the heir’s demat account. If no valid claim arrives, CDSC completes the transfer. The same report says CDSC must ensure that subsequent bonus shares and dividends flow to the new owner.
The heir needs their own demat account and a Meroshare login before any of this lands. If they do not have one, open it first. Our guide to opening a demat and Meroshare account in Nepal walks through it.
Two practical warnings belong here.
First, do not log in to the deceased’s Meroshare and start selling. Even if the family knows the password, the account belongs to someone who has died. Selling from it before transmission puts money into a bank account that may already be frozen, and it hands any unhappy sibling a ready-made grievance. Our view is simple: wait for transmission, then decide.
Second, the bank account linked to the demat matters. Cash dividends are paid to the bank account registered with the DP. If that account was in the deceased’s name and the bank has frozen it, dividends either bounce or sit there. Update the bank details as part of the transmission, not months later.
When the shares are still on paper
The Palpa Cement notice involved a physical certificate. That is why it went through the company’s share registrar (Nabil Investment Banking, in that case) rather than only through a DP. For paper shares, the heir applies to the registrar of each company separately, the registrar publishes its own 35-day claim notice, and only after that do the shares get credited to the heir’s demat account.
Now imagine a parent who bought shares in the 2000s and never dematerialized them. Twelve companies, twelve registrars, twelve sets of attested documents, twelve notices. Some of those companies have merged since. Some have changed names. Some registrars have changed. Each one is a separate small project for a grieving family.
There is also money leaking out while this drags on. Dividends that go unclaimed long enough get swept into the Investor Protection Fund set up under Section 183 of the Companies Act, 2063. ICFC Finance’s notice of July 24, 2026 is a typical example: it gave shareholders one month to collect cash dividends from FY 2074/75 and 2075/76 before moving them to that fund, and it urged holders of physical certificates to dematerialize.
This is why we think the paper problem is the real risk in Nepali share inheritance, not the demat process. If you or your parents still hold certificates, read our guide on how to dematerialize physical share certificates and do it while the owner is alive and can sign. CDSC’s FAQ says dematerialization should take about 10 working days once the request is submitted. Transmission of paper shares after death takes far longer, because every step needs someone else’s signature.
What if the heirs disagree?
The consent letter is the pressure point. One sibling who refuses to sign can stall the whole thing.
CDSC’s FAQ lists a separate path for this situation: ownership transfer based on a court order. The applicant submits the TRF with an attested copy of the court decision, their citizenship, and the court’s execution slip. In other words, if the family cannot agree, the dispute goes to the District Court, and the shares follow the judgment.
That route works, but it is slow and expensive, and it turns a portfolio worth a few lakh into a legal case worth much more in time and lawyer fees. Partition and succession cases in Nepal can run for well over a year when contested.
CDSC’s FAQ also covers two other ownership changes that families often confuse with transmission. One is transfer after a formal partition (ansha banda), which requires a partition deed registered at the Land Revenue Office (Malpot). The other is a household transfer within three generations of the same family, which requires proof of the family relationship and applications from both the giver and the receiver. Both are useful for planning, because both can happen while the owner is still alive.
A worked example: the same portfolio, two families
Consider a retired teacher in Pokhara with a portfolio worth about NPR 25 lakh across 14 companies. He is survived by his wife and three adult children, one of whom lives in Australia. These figures are illustrative, not drawn from any real case.
Family A did nothing in advance. Four of the holdings are still paper certificates from the 2000s. Nobody knows the Meroshare password. The son abroad is hard to reach for a signed consent letter and has to get his signature attested overseas. The widow first visits the bank where her husband kept his salary account, learns the demat is with a different DP, and spends weeks finding it. Then she starts four separate registrar processes for the paper shares. Meanwhile, a cash dividend lands in a frozen account and another goes unclaimed. A year later, the demat holdings have moved to her account. Two of the paper holdings are still pending.
Family B has the same portfolio, but the teacher spent one afternoon on it in his late sixties. He dematerialized the four paper certificates. He wrote one page listing his DP, his BOID, his broker, and every holding. He told his children that the shares would go to their mother, and all three said yes. When he dies, the widow walks into one DP with one set of documents and three consent letters already signed, because everyone knew the plan. The son abroad has already sent a notarized consent. The DP files, CDSC publishes its notice, nobody objects, and the shares move.
The law is identical in both cases. The difference is preparation, and almost none of it costs money.
Tax: transmission is not a sale
A transmission is not a disposal of shares in the usual sense, because nobody is selling. Nepal also does not levy an inheritance or estate tax. Capital gains tax comes into play later, when the heir sells.
Where this gets less clear is the detail. How is the heir’s cost price set, and does the holding period start from the original purchase or from the transmission date? Those two answers decide whether a later sale is taxed at the short-term or long-term rate and how big the taxable gain is. We could not confirm a current IRD rule on either point from a primary source, so we are not going to guess. Before selling inherited shares, ask the broker how the cost and purchase date show up in Meroshare’s WACC (weighted average cost) record, and correct it if it looks wrong. Our explainer on capital gains tax on NEPSE shares covers how the general rules work.
For NRN and diaspora families
Two situations come up often for Nepalis abroad.
The first is the heir who lives overseas. Consent letters and identity documents usually need to be signed and attested, and doing that from Doha or Sydney takes time. If you are the overseas child of a parent who holds shares, sign and attest a consent document while you are home on a visit, and leave it with the family. It is a small act that removes the most common delay.
The second is the investor who lives abroad and holds NEPSE shares themselves. Your family in Nepal may have no idea what you own, which DP you use, or how to reach your broker. If you invest from overseas, the one-page holdings list matters even more for you than for a resident. Our guide on how NRNs can invest in NEPSE covers the account setup side.
What to do this month
None of this needs a lawyer for most families. It needs an afternoon.
- Dematerialize every paper certificate. This is the highest-value step. Paper shares turn one transmission into many.
- Write a one-page holdings list. DP name, BOID, broker, Meroshare username (not the password itself), linked bank account, and the companies you hold. Keep a copy where your spouse or a trusted relative can find it.
- Check your linked bank account. Make sure dividends go to an account your family can access or update quickly.
- Have the conversation. Tell your heirs what you intend, and find out now whether anyone objects. A disagreement you discover at age 60 is a conversation. One discovered after a funeral is a court case.
- Write a will if the default split is not what you want. If you want shares to go to one person rather than equally to spouse and children, put it in a valid will. A nominee entry will not override the other heirs.
- Ask your DP about its transmission form and any nominee facility. Procedures and fees vary, so get the answer from the institution that actually holds your account.
The verdict
Share transmission in Nepal is not a broken process. Since SEBON and CDSC moved it to the depository system, an heir with a demat account, the right documents and the other heirs’ consent can complete it through a single DP. The demat route works.
What fails is everything around it. Families do not know what was owned. Shares are still on paper, so the work multiplies by the number of companies. Heirs assume a nominee settles everything, then find out every other heir has to sign. And one sibling’s silence or refusal can push the whole thing into court.
So treat transmission as something you prepare for while you are alive, not something your family deals with afterward. Dematerialize, write it down, and get agreement in advance. The cost is one afternoon. Leaving it undone is how a family ends up reading its own 35-day claim notice two years late.
This is analysis, not financial advice.
Frequently Asked Questions
1. What happens to shares when a shareholder dies in Nepal?
The deceased person’s shares are legally transferred to their eligible heirs through a process called share transmission, handled through CDSC and the relevant depository participant (DP).
2. Does a nominee automatically inherit shares in Nepal?
No. Naming a nominee does not automatically establish ownership. Other legal heirs may need to provide written consent, and a valid will can help clarify inheritance wishes.
3. What documents are required to transfer inherited demat shares?
Generally, heirs need a Transmission Request Form, death registration certificate, citizenship documents of the deceased and heirs, a relationship certificate (nata pramanit), and consent letters from other heirs.
4. What happens if the deceased person held physical share certificates?
Heirs must apply separately to each company’s share registrar. This can involve additional paperwork and delays, so converting physical certificates into demat form beforehand is recommended.
5. Do heirs have to pay capital gains tax when they inherit shares?
Share transmission itself is not a sale. Capital gains tax generally becomes relevant when the heir sells the shares later. The applicable cost basis and holding-period treatment after inheritance should be confirmed with the broker or relevant authority.
