{"id":53288,"date":"2023-03-13T15:31:56","date_gmt":"2023-03-13T10:01:56","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=53288"},"modified":"2023-03-13T17:39:01","modified_gmt":"2023-03-13T12:09:01","slug":"what-are-share-certificates-and-the-process-to-obtain-it","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/","title":{"rendered":"What are Share Certificates and the process to obtain it?"},"content":{"rendered":"\n<p style=\"text-align:left\">Share certificates are issued to purchasing\nshareholders after a company issues shares in the market. A share certificate\nis a proof or receipt of the purchase of shares for the purchase and the ownership of shares in a company. Shares\ncertificates document that the purchaser of shares is the registered owner of\nthose shares from a specific date. It essentially transfers the rights and all\nthe duties of a member of the company to any other person who wants to be a\nmember. A share certificate is often issued by a company with a common seal to\nits members, evidencing the person named in the share certificate has\nsubscribed to certain shares of a company. The Companies Act of 2013 makes it\nmandatory to issue share certificates within a specified period of time after\nthe incorporation of the company. <\/p>\n\n\n\n<p style=\"text-align:left\">Section 2(84) of the Companies Act of 2013 defines shares as \u201ca share in the share capital of a company including stocks\u201d. Section 46 of the Act defines it as a certificate which is issued under the common seal of a company, if any, or signed either by two directors or a director &amp; the Company Secretary, if the company has appointed one, and shall specify the shares that are held by a member. The share certificate shall be the prima facie evidence of the shares that are held by such a member.<\/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\/what-are-share-certificates-and-the-process-to-obtain-it\/#Face_Value_Book_Value_Market_Value_of_Shares\" >Face Value,\nBook Value &amp; Market Value of Shares<\/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\/what-are-share-certificates-and-the-process-to-obtain-it\/#When_are_Share_Certificates_Issued\" >When are Share\nCertificates Issued?<\/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\/what-are-share-certificates-and-the-process-to-obtain-it\/#Signatories_of_a_Share_Certificate\" >Signatories of\na Share Certificate<\/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\/what-are-share-certificates-and-the-process-to-obtain-it\/#Details_in_a_Share_Certificate\" >Details in a Share Certificate<\/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\/what-are-share-certificates-and-the-process-to-obtain-it\/#What_are_the_Pre-Conditions_for_Issuing_Share_Certificates\" >What are the\nPre-Conditions for Issuing Share Certificates?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#What_are_the_Pre-Conditions_for_Issuing_Share_Certificates-2\" >What are the\nPre-Conditions for Issuing Share Certificates?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#Time_Frame_to_Issue_Share_Certificates\" >Time Frame to Issue Share Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#Procedure_to_Issue_Share_Certificates\" >Procedure to Issue Share Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#Maintenance_of_Share_Certificates_Forms\" >Maintenance of\nShare Certificates Forms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#Penalty_for_any_Breach_in_Issuing_Share_Certificates\" >Penalty for\nany Breach in Issuing Share Certificates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/what-are-share-certificates-and-the-process-to-obtain-it\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Face_Value_Book_Value_Market_Value_of_Shares\"><\/span>Face Value,\nBook Value &amp; Market Value of Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Face\nvalue or nominal value of shares which is decided by the company at the time of\nissuance of shares. It is the value of the common stock of the company and is\nissued in the initial stages of the offering of shares. It can also be called\nthe original cost of the stock. The face value of shares remains fixed until\nand unless the company decides to split the shares further. The face value is\nnot affected by fluctuations in the market price. Face value plays a key role\nas it helps in computing market value, premiums, discounts and the interest on\nthe shares and bonds.<\/p>\n\n\n\n<p>Book\nValue refers to the value of the company as is understood by referring to its\nbook of accounts, which is reflected through its net worth or its financial\nstatements. It represents the amount for which the company is worth by taking\ninto consideration the assets and liabilities of the company. The book value is\nhelpful in determining whether the stock of a company is overvalued\/undervalued,\nor fairly valued.<\/p>\n\n\n\n<p>The\nmarket value is the current price of the stock of a company that is quoted on\nthe Stock Exchange. It is mainly dependent on market conditions and often faces\nmany fluctuations in government policies, global events and macroeconomic data.\nMarket value is essential as it is referred to by investors and market analysts\nwhen mentioning the value of a business. The market value is considered the\nprimary parameter, which is used widely to calculate the market cap regards to\nsales. Market cap is the commonly used welcome bearing similar companies\nbecause share prices one more affected by actions like stock splits, bonus\namong other things.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_are_Share_Certificates_Issued\"><\/span>When are Share\nCertificates Issued?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Share certificates are issued when the company issues shares to persons who subscribe to its memorandum after its incorporation, and the capital for the shares bought has been paid to the company by its shareholders. The share certificates are required to be issued within two months from the date of <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>incorporation of company<\/strong><\/a>. In situations where shares are being transferred, the share certificates are required to be issued within a period of a month from the date on which the instrument of transfer was received.<\/p>\n\n\n\n<p>In case a share certificate that was issued previously\nends up getting lost or destroyed, or if it is surrendered by the company or if\nit ends up being damaged in any other way, a duplicate share certificate shall\nbe issued in accordance with Rule 6 of the Companies (Shares and Capital)\nDebentures Rules of 2014. The company secretary shall maintain all the renewed\nor duplicate share certificates. The shares must be issued within three months\nof the date on which all the documents are submitted. <\/p>\n\n\n\n<p>In accordance with Rule 5(2) of the Companies\n(Share Capital and Debentures) Rules of 2014, a share certificate must be\nissued in Form SH-1. Although the rules provide enough flexibility to companies\nto use their own format, it should somewhat resemble Form SH-1 and contain the\nbelow-mentioned details:<\/p>\n\n\n\n<ul><li>The name of the person for whom it is being issued.<\/li><li>The amount of each share<\/li><li>The related shares<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Signatories_of_a_Share_Certificate\"><\/span>Signatories of\na Share Certificate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Rule 5 (3) of the Companies (Share Capital\n&amp; Debentures) Rules of 2014 states that a share certificate shall be issued\nonly after it is signed by the below mentioned signatories:<\/p>\n\n\n\n<ul><li>Two Directors of the company that have been authorised\nduly by the board of directors of the company for the purpose of issue of\nshares or by the allotment committee of the board, if the committee has been\nauthorised by the board of directors, and<\/li><li>The company secretary or any other person who has been\nauthorised duly by the board of directors for this purpose.<\/li><\/ul>\n\n\n\n<p>Where the company issuing shares does not\nhave a common seal, a share certificate shall be signed either by two directors\nor by a director &amp; the company secretary if the company has appointed one.\nWhere the composition of the board of directors permits, at least one of the\nabove mentioned two directors shall be any person other than the whole time\ndirector or the managing director of the company.<\/p>\n\n\n\n<p>If the company is a one-person company which\nhas a common seal, the share certificate is required to be signed by the\ndirector along with the company secretary or any other person that may be\nappointed for this purpose by the board of directors. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Details_in_a_Share_Certificate\"><\/span>Details in a Share Certificate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The below mentioned details are required to\nbe provided in a share certificate: <\/p>\n\n\n\n<ul><li>Name of the issuing company<\/li><li>Corporate identity number or CIN<\/li><li>Address of the company&#8217;s registered office <\/li><li>Nominal value per share<\/li><li>Amount paid up per share<\/li><li>Folio number of the member<\/li><li>Certificate number<\/li><li>Number of shares that are represented by the share\ncertificate<\/li><li>Name of the holder of shares, including the joint holders\nof shares<\/li><li>Number of shares held in number and in words<\/li><li>Date of issue of the share certificate <\/li><li>Signature of directors and the company secretary or any\nother authorised persons<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Pre-Conditions_for_Issuing_Share_Certificates\"><\/span>What are the\nPre-Conditions for Issuing Share Certificates?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>There are certain conditions that are required to be fulfilled before the share certificate are issued. The below mentioned conditions are needed to be fulfilled before the share certificate is issued to the new allottees:<\/li><\/ul>\n\n\n\n<ol><li>The board of directors must authorise the issue of share certificates by passing a board resolution.<\/li><li>A share certificate shall be issued only when the letter of allotment or fractional coupon of appropriate value is surrendered.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Pre-Conditions_for_Issuing_Share_Certificates-2\"><\/span>What are the\nPre-Conditions for Issuing Share Certificates?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>There are certain conditions that are\nrequired to be fulfilled before the share certificate are issued. The below\nmentioned conditions are needed to be fulfilled before the share certificate is\nissued to the new allottees:<\/li><li>The board of directors must authorise the issue of share\ncertificates by passing a board resolution.<\/li><li>A share certificate shall be issued only when the letter\nof allotment or fractional coupon of appropriate value is surrendered.<\/li><\/ol>\n\n\n\n<ul><li>Where the share certificate is lost, a duplicate share certificate is required to be issued only after following the below mentioned conditions:<\/li><\/ul>\n\n\n\n<ol><li>Consent of the board of directors is required to be taken, and a resolution to issue duplicate certificates must be passed<\/li><li>With or without payment of a fee which shall not exceed \u20b950<\/li><li>On terms that may be found reasonable, like furnishing a copy of the FIR that has been launched with the police as supporting evidence.<\/li><li>Promise by the applicant that she shall indemnify the company in case there is any loss that is sustained on account of the lost share certificate and to return the same if it is discovered later.<\/li><li>In case an investigation is conducted to trace the lost certificate, any payment in that regard incurred by the company shall be considered an out of pocket expense which shall be paid by the applicant.<\/li><li>A duplicate share certificate shall be issued by clearly mentioning that the certificate is a duplicate which has been issued in lieu of the lost share certificate. <\/li><\/ol>\n\n\n\n<p>Particulars of the duplicate share\ncertificates issued shall be entered in the register of renewed and duplicate\nshare certificates as provided under Form Number SH-2, providing details of the\nname of the person to whom the certificate has been issued, the number of the\nshare certificate and the date of issue of share certificate in lieu of which\nthe duplicate certificate has been issued. Necessary changes shall also be made\nin the Register of Members in the \u201cRemarks\u201d column through suitable cross\nreferencing. The Register of Renewed and Duplicate Certificates shall be kept\nat the registered office of the company or any other place where the register\nof members has been kept and shall be kept permanently in the company secretary&#8217;s\ncustody or any other person authorised by the board.<\/p>\n\n\n\n<p>Every change that is made in the Register of Renewed and Duplicate Share Certificates must be duly authenticated by the company secretary or any other person who has been authorised by the board of directors for the purposes of sealing the share certificate and signing it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Time_Frame_to_Issue_Share_Certificates\"><\/span>Time Frame to Issue Share Certificates<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per Section 54(3) of the Companies Act of\n2013, in case of an allotment or transfer, the company is required to deliver\nthe share certificates in the below mentioned manner:<\/p>\n\n\n\n<ul><li>When shares are being allotted, then the share\ncertificates must be delivered within two months from the date of allotment<\/li><li>If the members are subscribed to the Memorandum of Association\nof the company, then the share certificates must be issued within two months\nfrom the date of incorporation of the company<\/li><li>where the shares are transferred, then the share\ncertificates must be issued before the expiry of one month from the date of\nreceipt of the instrument of transfer, along with the relevant documents<\/li><li>where there is a transmission of shares, the share\ncertificate is required to be issued within one month <\/li><\/ul>\n\n\n\n<p>The time frame for issuing a duplicate share\ncertificate shall be in the below mentioned manner:<\/p>\n\n\n\n<ul><li>For a listed company, the duplicate share certificate\nmust be issued before the expiry of 45 days from the date of submission of all\nthe relevant documents<\/li><li>For an unlisted company, the duplicate share certificate\nshall be issued before the expiry of 3 months from the date of submission of\nall the relevant documents.<\/li><\/ul>\n\n\n\n<p>The time frame for safekeeping and preserving\nthe share certificates shall be in the below mentioned manner:<\/p>\n\n\n\n<ul><li>All printed blank share certificates must be held safely\nfor a period of 3 years.<\/li><li>In situations of disputed cases, the share certificates\nmust be kept permanently till the company is in existence<\/li><li>all the surrender share certificates must immediately be\ndefaced or stamped or printed in bold letters as cancelled and must be\ndestroyed after the expiry of a period of 3 years from the date on which the\ncertificate was surrendered. The surrender of share certificates shall be under\nthe authority of the board of directors and shall be facilitated by passing a\nboard resolution.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_to_Issue_Share_Certificates\"><\/span>Procedure to Issue Share Certificates<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The below mentioned procedure is required to\nbe followed the issue share certificates in accordance with the Companies Act\n2013:<\/p>\n\n\n\n<ul><li><strong>Board Meeting and Allotment of Shares<\/strong><\/li><\/ul>\n\n\n\n<p>A meeting of the Board of Directors must be\nconducted in order to form a small committee of directors to decide upon the\nallotment of shares. The committee formed for this purpose shall be called the\nAllotment Committee. The committee shall then decide upon share allotment and\nthen submit the report to the board of directors.<\/p>\n\n\n\n<p>If the Board of Directors approves the board\nreport, then it will pass a resolution to allow the shares to the applicant.\nRule 5 makes the passing of a board resolution mandatory before the issuance of\nshares.<\/p>\n\n\n\n<ul><li><strong>Delivery of Letter of Allotment<\/strong><\/li><\/ul>\n\n\n\n<p>Once the board of directors have passed the\nboard resolution for the allotment of shares, a letter of allotment shall be\ndispatched to all the concerned members. The allotment letter shall contain\ninformation pertaining to the number of shares that have been allotted to an\nindividual. In accordance with Rule 5, share certificates can only be issued\nafter a board resolution is passed and a letter of allotment or fractional\ncoupons are surrendered to the company.<\/p>\n\n\n\n<ul><li><strong>Preparing Share Certificate<\/strong><\/li><\/ul>\n\n\n\n<p>All the share certificates that are to be\nissued must be prepared in accordance with Form SH-1. All securities of\nunregistered public companies shall be issued in dematerialised form. The share\ncertificate must be signed either by two directors of the company or by a\ndirector and a company secretary if the company has appointed one. If there is\na common seal for the company, it is required to be fixed on the signatures of\nthe person&#8217;s signing the certificate. <\/p>\n\n\n\n<p>Once the shares have been allotted, an entry must\nbe made in the register of members under Form MGT-1 must be made before the\nexpiry of 7 days from the date of allotment. The entries made in the register,\nas mentioned above, must be authorised by the company secretary or any other\nauthorised person. Requisite stamp duty that is applicable in rates and provisions\nof the Stamp Act of the relevant state where the registered office of the\ncompany is situated must also be included. <\/p>\n\n\n\n<p>After the share certificates have been\nprepared in the manner mentioned above, a board resolution shall be passed by\nthe board of directors to issue the share certificates. <\/p>\n\n\n\n<ul><li><strong>Intimation and Dispatch of Share Certificates<\/strong><\/li><\/ul>\n\n\n\n<p>Either the director or the <a href=\"https:\/\/corpbiz.io\/learning\/the-role-of-the-company-secretary\/\"><strong>company secretary<\/strong><\/a> shall inform the shareholders that the share certificates are ready to be issued and which will be delivered in exchange for the letters of allotment and once the bankers confirm payment of the allotment money. Public notice must also be served first as general information for all the members of the company. All members who surrender their letters of allotment to the company shall receive the share certificates within the time frame as mentioned above.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Maintenance_of_Share_Certificates_Forms\"><\/span>Maintenance of\nShare Certificates Forms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Rule 7 of the Companies (Share Capital and\nDebentures) Rules of 2014 states that blank forms that are to be used to issue\nshare certificates must be printed, and the printing shall take place only with\nthe expressed authority board resolution that has been passed by the board of\ndirectors of the company and the blank form shall be kept the custody of the\ncompany secretary or any other person whom the board of directors may authorise\nfor this very purpose. The company secretary or any other person authorised by\nthe board of directors will be responsible for providing an account of these\nforms to the board of directors.<\/p>\n\n\n\n<p>The below mentioned shall be responsible for\nthe preservation, maintenance and safe custody of all the documents and books\nin relation to the issue of share certificates along with the blank forms of\nshares certificates:<\/p>\n\n\n\n<ul><li>The committee of the board of directors, if it has been\nauthorised by the board or if the company has a company secretary, then such\ncompany secretary.<\/li><li>In case the company has no company secretary, any\ndirector of the company who has been authorised by the board of directors for\nthis very purpose.<\/li><\/ul>\n\n\n\n<p>Rule 7 also states that books of accounts and\ndocuments in relation to the issue of shares certificates must be preserved for\na period of not less than 30 years in good order. In situations of disputed\ncases, the books and documents shall be kept permanently in every certificate\nthat has been surrendered to the company and shall be defaced immediately\neither by printing the word cancelled in bold letters or stamping, and it may\nbe destroyed after a period of 3 years from the date on which it was\nsurrendered. All of this shall be done after passing a board resolution by the\nboard of directors and in the presence of a person who has been duly authorised\nby the board in this regard.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_for_any_Breach_in_Issuing_Share_Certificates\"><\/span>Penalty for\nany Breach in Issuing Share Certificates<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A company that defaults to complying with the\nprovisions of the Companies Act of 2013 and the Companies (Share Capital and\nDebentures) Rules of 2014 with respect to the issue of share certificates, the\ncompany shall be liable to be punished with a fine that shall not be less than \u20b925,000 but that extend up to \u20b95 lakh. Every officer of the company involved in any\ndefault with respect to the issue of shares shall be liable to be fined for an\namount which is not less than \u20b910,000\nbut could extend up to \u20b91\nlakh.<\/p>\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>Issuing of share certificates is a mandate that is required to be followed by every company after its incorporation as is provided under the Companies Act of 2013. A share certificate is a proof or receipt of the purchase of shares for the purchase and the ownership of shares in a company. It essentially transfers the rights and the duties of a member of the company to any other person who wants to be a member and shall be the prima facie evidence of the shares that are held by such a member. <strong>The<\/strong> <strong>Companies Act<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/acts-rules\/ebooks.html\"><strong>[1]<\/strong><\/a><\/sup> and the Companies (Share Capital and Debentures) Rules of 2014 lay down the manner, form and procedure of issuing share certificates. It is imperative for companies to comply with the provisions laid down under the law with respect to the issue of share certificates in order to avoid incurring penalties for both the company and the concerned officer in charge of the issue of share certificates.<\/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\/companies-appointment-and-remuneration-of-managerial-personnel-amendment-rules-2023\/\">Companies (Appointment And Remuneration Of Managerial Personnel) Amendment Rules 2023<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Share certificates are issued to purchasing shareholders after a company issues shares in the market. A share certificate is a proof or receipt of the purchase of shares for the purchase and the ownership of shares in a company. Shares certificates document that the purchaser of shares is the registered owner of those shares from [&hellip;]<\/p>\n","protected":false},"author":47,"featured_media":53322,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120],"tags":[3216],"acf":{"service_id":"408"},"authorName":"Sherin Jose","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/11\/MicrosoftTeams-image-4-e1668575330329.jpg","authorDescription":"Sherin has degrees in Law and English Literature from the University of Delhi. She is adept at legal research and writing and enjoys discussing and analysing important legal developments. Her primary interests lie in Corporate, FinTech and IPR Law and she is always on the lookout for exploring new developments in the area. She is an avid reader who loves classics and contemporary fiction. She likes to travel, bake and obsess over cat videos in her free time.","postViews":4190,"readingTime":11,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/53288"}],"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\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=53288"}],"version-history":[{"count":16,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/53288\/revisions"}],"predecessor-version":[{"id":53341,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/53288\/revisions\/53341"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/53322"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=53288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=53288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=53288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}