CS Jatin Bajaj
A certificate issued under the Common Seal , if any, of the Company or signed by 2 Director or by a Director or a Company Secretary, wherever the Company has appointed a Company Secretary, specifying the shares held by the person , shall be prima facie evidence of the title of the person to such shares.( Bare Act Language).
Interpretation & Crux
- certificate shall be signed by 2 Directors or
- By a Director or a CS if appointed
- certificate shall indicate the number of shares held by such person
- certificate is the solid proof that he is the shareholder of the Company
When to issue duplicate share certificate?
a duplicate share certificate is issued if such certificate is proved to have been lost or destroyed or has been defaced, mutilated or torn and is surrendered to the Company
Important note and requirement under companies act
Manner of issue of certificate of shares or duplicate thereof, the form of certificates, the particulars to be entered in Register of Members.
Rule 5 of Companies (Share Capital and Debentures) Rules, 2014
Whenever a Company issues any share capital, certificate of shares held in name of company shall be issued only when:
- Resolution is passed by the Board in Board Meeting
Point to be noted: Every Certificate of shares shall be issued in form SH1 and such form shall specify the name of the persons in whose favour the certificate is issued, shares to which it relates and the amount paid theron.
Important note:
The particulars of every share certificates shall be entered in Register of Members maintained in accordance with section 88 in form MGT1, along with the name of person to whom it has been issued indicating the date of issue.
Rule 6 of Companies (Share Capital and Debentures) Rules, 2014
Issue of renewed or duplicate share certificates
♣ share certificate or shares shall not be issued either in exchange of those which are :
- subdivided
- consolidated
- replacement of those which are defaced,
- militated
- torn
- Worn out etc.
Unless the certificate in lieu of which it is issued is surrendered to the Company
Point to be considered The Company may charge such fees as Board thinks fit, not exceeding 50 per certificate.
Crux: Maximum fees to be charged for re- issue of Share Certificate id 50 per Certificate
- Where certificate is issued, it shall be stated on the face of it and be recorded in the Register maintained for the purpose :
For Example: ISSUED IN LIEU OF SHARE CERTIFICATE NO: 1,2,3, ETC SUBDIVIDED/REPLACED/ CONSOLIDATED ETC.
IMPORTANT NOTE: Where the certificate is issued in any of the circumstances mentioned above then the word duplicate shall be stamped or printed on face of share certificates.
TIME LIMIT FOR ISSUE OF DUPLICATE SHARE CERTIFICATES FOR LISTED COMPANIES AND UNLISTED COMPANIES
In case of Unlisted Companies, the duplicate share certificates shall be issued within a period of 3 months and in case of listed companies it shall be issued within a period of 45 days from date of submission of complete documents with the Company
Point to be noted: The particulars of every Share Certificates shall be entered in Register of Duplicate Share Certificate in form SH2
stamp duty on Share Certificates: According to Section 3 of Indian Stamp Act 1899, Every share certificate shall bear Stamp duty irrespective of state or union Territory from where certificates are issued.
Important Note : Every person whose name is entered in Register of Member is entitled to receive Share Certificate within 2 months from date of Allotment.
Point to be noted : according to Indian Stamp act, Company shall pay stamp duty within 30 days of issue of Share Certificates
- Stamp duty can be paid by putting adhesive Stamp and cancelling the same
- Putting adhesive stamp on each share certificate is not necessary if securities are issued in dematerialized form. I.e. electronic form.
- Stamp duty is payable on issue price and not on the value of securities
- Stamp duty on shares is state subject but stamp duty on debenture is Union subject
- Rate of stamp duty payable in Delhi is 1 Rupee for every 1000 or part thereof of the value of share including premium
Procedure for payment of Stamp Duty in Delhi
- First of all Company will allot the Shares
- Company will issue Share certificates within 60 days of allotment of shares
- After issue of Share Certificate Stamp duty will be paid within 30 days of issue of Share Certificate
Following documents shall be prepared:
- Covering Letter ( Duly affixed Court Fees stamp of Rs. 10/-)
- list of existing Directors
- List of Shareholders
- List of Allotees
- Cerified Copy of PAS3- Return of Allotment / INC-7- application FOR INCORPORATION OF company
- Certified Copy of MOA & AOA
- Cetificate of previous Stamp duty if paid
Rule- 7 – Maintainance of Share Certificates and other Related Documents
♣ All blank form shall be used for the issue of Share Certificates shall be printed and such form shall be printed only on Resolution passed by Board at Board Meeting or by Circulation and such blank forms must be consequently numbered
♣ Following persons shall be Responsible for maintenance and preservation of documents related to Share Certificates including blank forms namely :
- Committee of Board, if authorized by the Board or if Company has CS , then by such CS
- If Company does not have CS, then a Director specifically authorized by the Board.
What are the implication of not affing Common seal on share certificate