Share certificate
| Share certificate |
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| See also |
Share certificate refers to a document which is issued by a company evidencing that a person named in such certificate is the owner of the shares of Company as stated in the share certificate. Within two months after the allotment of shares or one month after lodgement of a transfer of shares, a corporation is required to complete, have ready for delivery, and send or deliver share certificate in relation to those shares. This requirement does not apply in the case of uncertificated shares which are covered by the operating rules of a clearance and settlement facility. The certificate must state the name of the corporation and the amount if any, which is unpaid on the shares. Once it has issued a share certificate which complies with the section, a corporation is estopped from denying that the person named in certificate is the shareholder, is entitled to those shares, or has paid the amount stated. If a director, officer or agent of the corporation issues a forged share certificate, then a third party who has no actual knowledge of the forgery can assume that document is genuine, that is has been issued under proper authority[1].
The share certificate contents[2]:
- Name
- Fully address of the registered office of the company
- Name and the address of the shareholders
- Number and class of shares
- Distinctive number of shares
- Day and date of the issue of certificate
- Certificate number
It is issued under the common seal of the company, be affixed in the presence of the two directors and the secretary and property appointed attorneys. All these persons sign the share certificate which also bears a revenue stamp.
Rules that have been issued by the government to strictly control the issuance of share certificates are as follows[3]:
- Issue of Share Certificates - the board of directors must pass a resolution for the issue of share certificates. No fresh certificate should be issued unless the previous share certificates have been surrendered by the shareholders to the company.
- Issue of Duplicate Share Certificate- issue of duplicate share certificate- if a shareholder requests the company to issue the duplicate share certificate, the company may impose some reasonable terms regarding the evidence of the loss of original certificate.
- Liability in Case of Fault in Issuing he Share Certificate- in the company if any officer of the company commits any fault in issuing the share certificates, he may be charged a fee up to Rs.5000 per day for the period during which the fault continues.
- Form of Certificates- every certificate issued by a company must specify the name of shareholders, the shares for which it is issued and the amount paid up thereon.
- Stamping and Signing the Certificates- every certificate must be issued under the common seal of the company, affixed in the presence of at least two directors and the secretary of the company or their attorneys.
- Records of Share Certificate- whilst a share certificate is being issued all the relevant particulars must be entered in the register of members.
Footnotes
References
- Dornseifer F., (2015). European Law Publisher,"Corporate Business Forms in Europe".
- Tomasic R.,Bottomley S., McQueen R. (2012). Federation Press , "Corporation Law in Australia".
- Tyagi M.,Kumar A., (2010). Atlantic Publisher & Dist , "Company Law".
Author: Patrycja Bajda
