Issue of Share Certificates
A share certificate is an official document issued by a company that serves as proof of ownership of a specified number of shares by the individual named on the certificate.
Overview
After incorporation, a company must issue share certificates to its shareholders or promoters within 60 days, as required by the Companies Act, 2013.
If funds are received for the allotment of shares through private placement, the shares must be allotted within 60 days of receiving the funds. If not, the company must return the money within 15 days.
If the subscription amount is received but shares are not allotted within 60 days, the company must refund the money to the investor within 15 days. Failure to do so will result in the amount being treated as a deposit.
Benefits of Share Certificates
Share Certificates:
A share certificate is a legal document issued by a company to its shareholders, serving as evidence that the person named on the certificate owns a specified number of shares in the company.
It is an important document for shareholders, as it proves their ownership in the company.
Clarification:
Unlike savings accounts or certain financial instruments called “share certificates” in banks (often referring to term deposit certificates in some countries), share certificates in a company context are not depository or interest-bearing accounts.
Instead, they represent an ownership stake in the company, not a fixed deposit or savings account.
The value of the shares and any returns (such as dividends or capital gains) depend on the company’s performance, not a fixed interest rate.
Key Points:
Proof of Ownership: Share certificates confirm that an individual holds a specific number of shares in a company.
Transferable: Shareholders can transfer their shares to others, and the share certificate is an essential document in this process.
Required by Law: Companies are legally required to issue share certificates to shareholders within a specific period after the allotment of shares.
Checklist/Requirements
Essential Details on a Share Certificate:
- Name of the Issuing Company.
- CIN (Corporate Identification Number) of the Company.
- Registered Office Address of the Company.
- Name of the Owner(s) of the Shares.
- Folio Number of the Member.
- Number of Shares Represented by the Certificate.
- Amount Paid on Such Shares.
- Distinctive Number(s) of the Shares.
Process of Issuing Share Certificates
Steps for Issuing Share Certificates
Step 1: Conduct a Board Meeting & Allot Shares
Hold a board meeting to approve the allotment of shares to the applicants.
Step 2: Update the Register of Members
Enter details of the new shareholders and their shareholdings in the company’s register of members.
Step 3: Prepare and Print Share Certificates
Prepare share certificates with all required details and get them signed by authorized signatories.
Step 4: Intimate and Dispatch Share Certificates
Inform the shareholders and dispatch the duly signed share certificates to them within the stipulated time (usually within two months from the date of allotment).
Key Deliverables
- Share certificates
Why Choose Us
Friendly to Entrepreneurs
Our pros will offer you all of the promised deliverables within the allotted period, and we make the procedure so quick and simple that you won’t even feel the headache of all the paperwork.
Skilled Experts
Every one of our experts is trained and skilled in that specific field. ensuring that no errors are made when filing with the authorities in order to prevent the company from incurring penalties for errors.
One Place to Go for All of Your Needs
We assist you at every stage of your company’s development, including incorporation, accounting and taxation, secretarial compliance, and legal support.
Economical
Since cost is a major factor in any business’s growth stage, we don’t surprise our clients with extra fees; instead, you pay what is shown in the original plan.
