A Share certificate is a document signed on behalf of a corporation that may be legal proof of possession of the number of shares indicated.
In alternative words, A share certificate refers to a document that is issued by a Company evidencing that someone named in such certificate is that the owner of the shares of the corporate as declared within the share certificate. The Companies Act, 2013 mandates companies to issue share certificates post their incorporation.
A share certificate simply contains all the main points of the stockholder and also the variety of shares they own.
CONTENTS OF A SHARE CERTIFICATE
• Name or address of the registered workplace of the company
• Serial variety of the certificates
• Date of issue of certificates
• Name and Address of the stockholder
• Number and sophistication of shares
• Nominal price of every share
• Amount purchased every share
• Seal/Stamp of the corporate
• Space for signature
ISSUE OF SHARE CERTIFICATES
Share Certificates area unit an indication for shareholders owning a specific variety of shares. According to The Companies Act, 2013 it’s obligatory for Companies to issue share certificates post-incorporation.
Must issue share certificate at allotment or subscription or at the time of Incorporation. A Board resolution should be passed in the Board Meeting for the issue of the Certificate. The prepared share certificates must conform to the standards mentioned above and should be issued under the signature of two Directors or Company Secretary or any other person authorized by the Board of Directors.
The share certificate must be issued from the registered office of the Company and payment of stamp duty on the issue of share certificate must be made as per the Stamp Act of the State. After issuing the share certificate, must enter the details of share certificates into to Register of members maintained under Section 88 of the Companies Act, 2013 Along with the Name and date of issue.
DOWNLOAD SAMPLE SHARE CERTIFICATE – CLICK HERE
TIME LIMITS FOR THE ISSUE OF SHARE CERTIFICATES
|1.||In case of subscribers to the memorandum||Within 2 months from the date of incorporation|
|2.||In the event of allotment of shares||Within 2 months from the date of allotment|
|3.||In the case of transfer or transmission of securities||Within 1 month from the date of receipt by the company of the instrument of transfer or intimation of transmission|
|4.||In case of issue of duplicate share certificate||Within 3 months of submission of complete documents and details with the company|
|5.||In case of allotment of debentures||Within 6 months from the date of allotment|
PENALTY FOR DEFAULT IN ISSUE OF SHARE CERTIFICATE
According to The Companies Act 2013, wherever a Company makes default in compliance with provisions regarding share certificate, the Company would be punishable with a fine starting from Rs. 25,000 to Rs. 5,00,000.
Every officer who is at the default of such a company would be punishable with a fine starting from Rs. 10,000 to Rs. 1,00,000.
The share certificate shall bear the tax as per the various State from wherever the certificate is issued. So, it’s not basically needed to pay tax on a share certificate in this explicit state wherever the registered workplace of the corporate is found, it entirely depends on the execution of the share certificate wherever it absolutely was signed. At last, it’s suggested to all or any please pay the tax within the state wherever the registered workplace of the company is found.
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