{"id":38953,"date":"2021-12-27T11:30:42","date_gmt":"2021-12-27T06:00:42","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=38953"},"modified":"2021-12-27T11:30:45","modified_gmt":"2021-12-27T06:00:45","slug":"share-certificate-provisions-for-issuance-and-renewal","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/","title":{"rendered":"Share Certificate: Provisions for Issuance and Renewal"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A share certificate is a legal document\nissued by an organization declaring that an individual named in such a\ncertificate is the owner of the company&#8217;s shares as stated in the share\ncertificate. The Company Act, 2013 made it a legal compulsion for companies to\nissue share certificates after completing the incorporation process.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/#Standard_Details_Enclosed_in_the_Share_Certificate\" >Standard\nDetails Enclosed in the Share Certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/#Procedure_for_the_Issuance_of_Share_certificates\" >Procedure\nfor the Issuance of Share certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/#Penalty_for_Breaching_Provisions_Relating_to_Share_Certificate_Issuance\" >Penalty for Breaching Provisions Relating to Share Certificate Issuance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/#Issuance_of_Renewed_or_Duplicate_Share_Certificate_as_per_Companies_Share_Capital_and_Debentures_Rules_2014\" >Issuance of Renewed or Duplicate Share Certificate as per Companies (Share\nCapital and Debentures) Rules, 2014<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/share-certificate-provisions-for-issuance-and-renewal\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Standard_Details_Enclosed_in_the_Share_Certificate\"><\/span>Standard\nDetails Enclosed in the Share Certificate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Every share certificate issued must enclose the following information:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Name\nof the company issuing the certificate<\/li><li>Corporate\nIdentification Number, i.e. CIN of such Company<\/li><li>Address\nof the registered office of a company<\/li><li>Name\nof owners of such shares<\/li><li>Number\nof shares to be listed on the share certificate<\/li><li>Folio\nnumber of member<\/li><li>An\namount paid out on such shares<\/li><li>Period\nfor issuing Share Certificate<\/li><li>Distinct\nnumber of the shares<\/li><\/ul>\n\n\n\n<p>The company is mandated to issue the\nshare certificate within two months from the incorporation date. Where\nadditional shares are allocated to the existing or new shareholders, the share\ncertificates must be issued within two months from the date of allotment. In\nthe case of share transfers, such certificates must be issued to transferees\nwithin one month of receipt of the instrument of transfer by the said company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_the_Issuance_of_Share_certificates\"><\/span>Procedure\nfor the Issuance of Share certificates<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Step 1: Board meeting and shares&#8217;\nallotment <\/em><\/strong><\/p>\n\n\n\n<p>A board meeting is called for the shares&#8217;\nallotment. The BODs, i.e. Board of directors, deploy a committee of directors\n(technically known as the allotment committee). The said committee would then\nbe responsible for making a final decision on the share&#8217;s allotment.<\/p>\n\n\n\n<p>As soon as the allotment committee\nrenders its report for the allotment of shares, the Board authenticates such\nreport and then passes the resolution to serve the purpose of shares&#8217;\nallocation.<\/p>\n\n\n\n<p>After successfull allotment, the company\nsecretary (CS) sends allotment letters to the concerned members. The said\nletter is a notification for the applicant, prompting that the company has\nallotted the applicant&#8217;s shares.<\/p>\n\n\n\n<p>Moreover, said letter is acknowledged as\nthe share certificate till the company issues the final certificate.<\/p>\n\n\n\n<p><strong><em>Step 2: Register of members<\/em><\/strong><\/p>\n\n\n\n<p>The company secretary (CS) then prepares\na register of a member against the list of applications received and allotment\nsheets. <\/p>\n\n\n\n<p>The said register facilitates detail\nabout the shareholders and information of the share allotted to them.<\/p>\n\n\n\n<p><strong><em>Step 3: Preparing and Printing Share\nCertificates<\/em><\/strong><\/p>\n\n\n\n<p>The company secretary (CS) should arrange\nthe share certificate form as recommended by the Articles of Association (AoA).<\/p>\n\n\n\n<p>The CS must get the said form printed\ntogether with all the relevant information as per the norms of the governing\nlaw. Further, CS must fill in all the required details in the certificate with\nthe application register and allotment sheets. The CS should ensure that the\ncertificate encloses the signature of the company&#8217;s two directors.<\/p>\n\n\n\n<p>The secretary must sign the share\ncertificate. In addition to that, the CS must ensure that the company&#8217;s seal\nalong with the revenue stamp is affixed aptly on each of the share\ncertificates. Lastly, a board meeting should be called to pass the resolution\nfor issuing the share certificate.<\/p>\n\n\n\n<p><strong><em>Step 4: Notification and dispatch of\nShare Certificate <\/em><\/strong><\/p>\n\n\n\n<p>The CS must prompt all the shareholders\nthat the share certificates are in the pipeline and would be dispatched in\nexchange for allotment letters and bankers receipts prompting payment of the\nallotment fees. <\/p>\n\n\n\n<p>Public notification must be issued for\nthe essential detail of the members. Members who opt to surrender their letter\nof allotments, share certificates are routed to concerned shareholders via\nregistered post. As per their requirement, the local shareholders can secure\nthe certificate personally from the company&#8217;s registered office or the\ndesignated agency.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_for_Breaching_Provisions_Relating_to_Share_Certificate_Issuance\"><\/span>Penalty for Breaching Provisions Relating to Share Certificate Issuance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Where a company commits any error in\nadhering to the norms relating to the issuance of share certificates, such\ncompany would be subjected to penal provision with a fine of less than Rs\n25000. The said amount could be extended to Rs 500000, and every defaulter of\nsuch a company would be compelled to pay a fine not less than Rs 10000, which\ncould further extend to Rs 100000.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issuance_of_Renewed_or_Duplicate_Share_Certificate_as_per_Companies_Share_Capital_and_Debentures_Rules_2014\"><\/span>Issuance of Renewed or Duplicate Share Certificate as per Companies (Share\nCapital and Debentures) Rules, 2014<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The certificate of share(s) shall not be\ngranted either in exchange for those which are consolidated or sub-divided or\nin replacement of those that are physically damaged. <\/p>\n\n\n\n<ul><li>or\nwhere the pages on the recording transfer have been fully utilized, unless the\nshare certificate in lieu of which it is granted is surrendered to the company;<\/li><li>Provided\nthat the company may charge a fee as per the Board&#8217;s recommendation, not\nsurpassing Rs 50000 per certificate granted on consolidation or spitting of the\ncertificate(s) or in replacement of certificate(s) in any of the events cited\nunder governing Act, it shall be stated on the face of it &amp; be included in\nthe relevant register stating that the &#8220;Issued in lieu of share\ncertificate No. &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.. sub s divided\/replaced\/on\nconsolidation&#8221; &amp; that no fee will be payable relating to the scheme of\narrangement approved by the HC or central government;<\/li><li>A\ncompany may supersede all the prevailing certificates by the new ones upon\nsub-division or consolidation of shares or reconstitution or merger or demerger\nto be surrendered subject to compliance with clause (a) of sub-rule (1) of rule\n5, sub-rule (2) of rule 5 and sub-rule (3) of rule 5.<\/li><li>The\nduplicate certificate shall not be granted in replacement of those that lost or\nphysically damaged, without Board&#8217;s permission and the payment of said fees and\non such reasonable terms, such as facilitating relevant evidence &amp;\nindemnity &amp; payment of out-of-pocket expenses addressed by the company in\nexamining the evidence produced:<\/li><\/ul>\n\n\n\n<p>Where a share certificate is granted in\nany of the events cited in this sub-rule, it shall be cited on the face of it\nand be recorded in the relevant register, that it is &#8220;duplicate issued in\nlieu of share certificate No. &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8221; and the\nterm &#8220;duplicate&#8221; will be stamped on the face of such certificate. <\/p>\n\n\n\n<ul><li>In\nthe case of unlisted entities, the duplicate share certificates shall be\ngranted within a timeline of three months; meanwhile, in the case of listed\nentities, said certificate will be granted within 45 days from the submission\ndate of complete documents with the company respectively.<\/li><li>The\ndetails of share certificates granted in pursuant to sub-rules (1) and (2) will\nbe entered in a Register of Duplicate, or renewed share certificates maintained\nin form No.SH.2 reflecting against the person&#8217;s name to whom the certificate is\nissued, the number and date of issuance of the certificate in replacement of\nwhich the new share certificate is granted, And the relevant changes reflected\nin the Register of Members by legit cross-references in the &#8220;Remarks&#8221;\ncolumn.<\/li><li>The\nregister must be kept at the company&#8217;s registered office or at such place where\nthe members&#8217; register is kept, and it shall be maintained permanently. It shall\nbe held in the CS&#8217;s custody or any other board-authorized person.<\/li><li>All\nentries recorded in the Register of Duplicate or renewed Share Certificates\nshall be approved by the CS or such other individual as may be authorized by\nthe Board&#8217;s members to seal and authorize the certificate under the provisions\nof sub-rule (3) of rule 5.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company is a legal establishment representing a group of individual, whether natural, legal or a mixture of both, with a common goal. Company members serve a common goal and work in synergy to accomplish pre-determined objectives.\u00a0 A company rolls out shares for members which means that they such part in the company.\u00a0Technically, members are also known as <strong><em>shareholders<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Shareholder\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>. Since these shares are transferable, they can be transfer in the manner mentioned above. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/issue-of-duplicate-share-certificate\/\">Issue of Duplicate Share Certificate: Step by Step Procedure <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A share certificate is a legal document issued by an organization declaring that an individual named in such a certificate is the owner of the company&#8217;s shares as stated in the share certificate. The Company Act, 2013 made it a legal compulsion for companies to issue share certificates after completing the incorporation process. Standard Details [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":38967,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120],"tags":[2061],"acf":{"service_id":"321"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":7716,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38953"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=38953"}],"version-history":[{"count":36,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38953\/revisions"}],"predecessor-version":[{"id":38990,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38953\/revisions\/38990"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/38967"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=38953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=38953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=38953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}