No share certificate shall be issued except:-
(i) In pursuance of a resolution of the Board of Directors.
(ii) On surrender to the company of the letter of allotment, except in case of issue against letter of acceptance or of remuneration, or in case of issue of bonus shares.
Procedure: The Company undertakes the following procedure for issue of share certificate.
- The Board of Directors before issuing a share certificate must pass a resolution to its effect the letter of allotment or fractional coupons of required values should be surrendered to the company. when such type of documentary evidence are not available due to the same having been lost or destroyed, the board should prescribe such conditions as regards to indemnity & payment of incidental expenses which is important for the company to incur in finding out the evidence for the purpose of proving the title of the shares.
- A share certificate will not be issued in exchange of consolidated or sub-divided shares or in place of torn, defaced old shares or where cases in the reverse for recording in lieu of which unless the certificate of which it is issued has been surrendered to the company.
- In every certificate the name of person should be mentioned who is the owner of the share to which the certificate relate and the amount paid up.
- The duplicate share certificate must not be issued in place of the lost or destroyed share without the consent of the board.
- Where a certificate has been issued in the place of old certificate, this fact must be shown on the face of the certificate.
- All the books and documents relating to the issue of share certificate must be under the safe custody of the managing Director and the other directors of the company.
- All the forms required for the purpose of the issue of share certificate must be printed under the authority of the Board and person appointed by the board should have the custody of all blocks and other equipment of printing.
- The issued share certificate must possess the common seal of the company which must be affixed in the presence of director or any other person appointed for the purpose by the Board. Share certificate should be signed by the persons mentioned above. One of the two directors must be a person other than the managing or whole time director.
- When a certificate is issued in lieu of one lost or destroyed, it must contain the statement “Duplicate issued in lieu of certificate No….” In addition to the duplicate shall be stamped or punched in bold letter across the face of the share certificate.
- Matter relating to the certificate issued under rule 4(1) must be entered on the Register of members against the name of persons and in whose favour the certificate have been issued, also mentioned the date of issue. In the same way entries relating to Rule 4(2) and (3) must be mentioned in the register. Both these categories should be approved either by the secretary or by a person appointed by the Board (Rule 7)
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