July 19, 2012

Notes on Procedures involved in Obtaining a Share Certificate

Under Part IV SHARE CAPITAL AND DEBUNTURES, Nature, numbering and certificate of shares, Section 84 of the Indian Companies Act, 1956, it is provided that a certificate under the common seal of the company specifying any shares held by any member, shall be prima facie evidence of the title of the member to such shares.

The certificate shall be issued withstanding to the procedures laid therein, notwithstanding to anything contrary provided in the articles of association of the company. By virtue of this section, Companies (Issue of Share Certificates) Rules, 1960 was made.

Interpretation Part:
Here, "Board" means that the Board of Directors of a company or a Committee thereof consisting of at least 3directors, if the number of directors are more than 6 and at least 2directors if the number of directors is less than 4.
If the Board of Directors permits, at least half of the number of members of the Committee shall consist of directors other than (I) a managing or whole time director.

A resolution must be passed by the board for issuing a share certificate.
The Letter of allotment/ Fractional coupons of requisite value must be surrendered back to the company. (if it is lost, the Board may carry out an investigation and incur the amount spent, if any, from the concerned person who has lost it)
The certificate must be issued under the common seal of the company, in the presence of 2directors or their representatives acting with the duly registered Power of Attorneys.
The Secretary or any other person appointed for this purpose by the board must also be present
It has to be signed by the directors as well as the Secretary or their representatives, as the case may be.
The Directors can sign by means of any machine, equipment or other mechanical means such as engraving in metal or lithography.
But they cannot use Rubber stamps.
(Note: There is no prescribed mode of signature for the secretaries)

No comments: