What will happen if you have lost an important jewel? The thought itself can cause you distress, as per the current data an Estimated Rs. 22,000/- crore of investors wealth is lying unclaimed with the insurance companies, mutual fund, corporate houses, banks & Employee provident fund organisation,
There are many who have witnessed the accidental discoveries of the wealth, but there also thousands of investors who don’t knew about the shares they have inherited from others or may have forgotten the investment.
Then in such situation it becomes important to know the basic details about the investment such task become more difficult if the instrument is not with you or you may have lost your investment instrument however, for same you can write to Company or Registrar and can follow the below mentioned article if they are lost.
Share certificate is a certificate issued by a company to the shareholder of the company, evidencing the number of shares and type of share he/she holding in the company. As per Companies Act, 2013 it is mandatory for the company to issue share certificate to shareholder within prescribed time.
Sometimes it happens that unfortunately, a person has lost its share certificate or his share certificate has been stolen. Then what would be the procedure a shareholder has to follow for applying the duplicate share certificate? In this article we will discuss the procedure to be followed in case Share certificate hold by shareholder has lost or Stolen.
A Company can prescribe in its article of Association, the procedure to be followed in case Share certificate hold by shareholder has lost or Stolen. A shareholder can follow such procedure as prescribed in company’s “article of Association” for applying for the duplicate share certificate.
In addition to the procedure prescribe in “Article of Association of the company”, a company has to follow the provisions of Section 46 read with Rule 6 of Companies (Share capital and Debentures) Rules, 2014.
As per Section 46 read with Rule 6 of Companies (Share capital and Debentures) Rules, 2014:
- A Duplicate share certificate in lieu of those that are lost or destroyed can be issued by company only after the approval of the Board of Directors.
- Board of Director shall impose such fees, as they think fit, for issuing duplicate share certificate lieu of those that are lost or destroyed. The fees imposed by the board shall not be more than rupees fifty per certificate.
- Board of Directors shall prescribe certain reasonable conditions before issuing duplicate certificate such as furnishing supporting evidence and indemnity and the payment of out-of-pocket expenses incurred by the company in investigating the evidence produced.
- The duplicate share certificate issued in lieu of those that are lost or destroyed shall be stated prominently on the face of it and be recorded in the Register maintained for the purpose (Form No.SH.2), that it is “duplicate issued in lieu of share certificate No…..” and the word “duplicate” shall be stamped or printed prominently on the face of the share certificate.
- In case of unlisted companies, the duplicate share certificates shall be issued within a period of three months, from the date of submission of complete documents with the company respectively.
- in case of listed companies, the duplicate share certificate shall be issued within forty-five days, from the date of submission of complete documents with the company respectively.
- The particulars of every duplicate share certificate issued as aforesaid shall be entered forthwith in a Register of Renewed and Duplicate Share Certificates maintained in Form No.SH.2 indicating against the name(s) of the person(s) to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross-references in the “Remarks” column.
- The register shall be kept at the registered office of the company or at such other place where the Register of Members is kept and it shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose.
Conclusion
Generally, the procedure for issuing duplicate share certificate in lieu of those that are lost or stolen are prescribed in the “Article of Association” of the company. The procedure prescribed in the “Article of Association” for issuing duplicate share certificate in lieu of those that are lost or stolen is always consistence with conditions mentioned under the provisions of Section 46 read with Rule 6 of Companies (Share capital and Debentures) Rules, 2014, because as per section 6 of Companies Act, 2013 “Articles of Association” of Company can not be inconsistence with the provisions of Companies Act, 2013.
Note: Article of association may mention additional requirement for issuing duplicate share certificate which are consistence with conditions mentioned under the provisions of Section 46 read with Rule 6 of Companies (Share capital and Debentures) Rules, 2014.
Further, if no such procedure is mentioned in “Article of Association” for issuing duplicate share certificate in lieu of those that are lost or stolen then Company can prescribe the procedure to the shareholder consistent with the provisions of Section 46 read with Rule 6 of Companies (Share capital and Debentures) Rules, 2014.
However In 21st Century where we all are appreciating being eco-friendly and finding the ways for Zero wastage, its rare to find a physical Share certificate, therefore the new age Companies are issuing shares in the Dematerialize forms this step has taken away the worry lost of certificate but given us an accountability of keeping everything safe and recorded.
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This article is written by Team Anupama Tripathi & Associates for the purpose of education & Comment, for more you can reach us at #8800839633 or [email protected]
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