CERTIFICATE OF SHARES
A certificate:
Ø
issued under the common seal, if any, of the
company or
Ø
signed by two directors or
Ø
by a director and the Company Secretary,
wherever the company has appointed a Company Secretary,
Specifying the shares held by any person, shall
be PRIMA FACIE evidence of the title of the person to
such shares.
A DUPLICATE CERTIFICATE
of shares may be issued, if such certificate —
(a) is proved to have
been lost or destroyed; or
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(b) has been defaced, mutilated or torn and is
surrendered to the company.
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Notwithstanding anything
contained in the articles of a company, the manner of issue of a certificate of
shares or the duplicate thereof, the form of such certificate, the particulars
to be entered in the register of members and other matters shall be such as may be prescribed.
COMMENT:
CERTIFICATE OF SHARES (WHERE SHARES ARE NOT IN DEMAT FORM)
(1)
Where a company issues any share capital, no certificate of any share or shares
held in the company shall be issued, except-
(a) in pursuance of a resolution passed by the Board; and
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(b) on surrender to the company of the letter of allotment
or fractional coupons of requisite value, save in cases of issues against
letters of acceptance or of renunciation, or in cases of issue of bonus shares:
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NOTE:
The Board has power to impose reasonable terms in case it has been observed by
the Board that letter of allotment is lost or destroyed, as to seek supporting
evidence and indemnity and the payment of out-of-pocket expenses incurred by
the company in investigating evidence, as it may think fit.
(2)
Every certificate of share or shares shall be in FORM NO. SH.1 or
as near thereto as possible and shall specify the name(s) of the person(s) in
whose favor the certificate is issued, the shares to which it relates and the
amount paid-up thereon.
(3)
Every certificate shall specify
Ø the shares to
which it relates and
Ø the amount
paid-up thereon and shall be signed by two directors or by a director and the
company secretary, wherever the company has appointed company
secretary:
NOTE: Provided
that in
case the company has a common seal it shall be affixed in the presence of
persons required to sign the certificate.
EXPLANATION - FOR THE PURPOSES OF THIS SUB-RULE, IT IS
HEREBY CLARIFIED THAT:-
in
case of an One Person Company, it shall be sufficient if the certificate is
signed by
Ø a director
and the company secretary or
Ø any other
person authorised by the Board for the purpose.
(a)
a director or company secretary shall be
deemed to have signed the share certificate if his SIGNATURE IS PRINTED
thereon as
Ø facsimile
signature by means of any machine, equipment or other mechanical means such as
engraving in metal or lithography or digitally signed,
Ø BUT NOT BY
MEANS OF RUBBER STAMP, provided that the director or company
secretary shall be personally responsible for permitting the affixation of
his signature thus and the safe custody of any machine, equipment or other
material used for the purpose.
(4)
The particulars of every share certificate issued in accordance with sub-rule
(1) shall be entered in the Register of Members maintained in accordance with
the provisions of section 88 along with the name(s) of person(s) to
whom it has been issued, indicating the date of issue.
(5) The record of the
depository is the prima facie evidence of the interest of the
beneficial owner in case a share is held in depository form.
(6) If a company with
intent to defraud issues a duplicate certificate of shares, the company shall
be punishable with
Ø 5 Times the
face value of the shares<= fine<= 10 Times the face value of such shares
or
Ø Rs. 10
crores, whichever is higher and
Every officer of the
company who is in default shall be liable for action under section 447.
DISCLAIMER: THE ARTICLE IS BASED ON THE RELEVANT PROVISIONS AND AS PER THE
INFORMATION EXISTING AT THE TIME OF THE PREPARATION. IN NO EVENT I SHALL BE
LIABLE FOR ANY DIRECT AND INDIRECT RESULT FROM THIS ARTICLE. THIS IS ONLY A
KNOWLEDGE SHARING INITIATIVE.
THE AUTHOR – CS DEEPAK
SETH (ASSOCIATE PARTNER HELPINGHANDS PROFESSIONALS LLP) AND CAN BE REACHED AT CONTACTHHPRO@GMAIL.COM
OR 9910248911.
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