Share warrant is a document issued by the company limited by shares, if so authorized by its Articles. The warrant is issued under the common seal of the company and states the owner of the warrant is entitled to the certain number of shares specified therein. As it is a bearer document, it can be transferred by mere delivery.
According to section 114 of the companies Act, the share warrant can be issued only after getting permission from the Central Government. The share warrants are issued only in respect of the shares, which are fully paid up. For the payment of the future dividend the dividend Coupons are attached with share warrant. When the Share warrant is issued by the company, the company immediately will strike out from its register of members, the name of the member in whose name the share warrant has been issued.
According to section 115, the following points should be recorded in the register of members upon the issue of the share warrant:-
- The date on which the share warrant has been issued.
- The reason for the issue of the share warrant.
A statement of the shares specified in the warrant, distinguishing each share by its number.
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