Time
limit to issue of Share Certificate Under Companies Act, 2013
A
certificate of shares is evidence to the effect that the allottee is holding a
certain number of shares of the company showing their nominal and paid-up value
and distinctive numbers. This certificate is a prime facie evidence of
title to the shares in the possession of shareholders. [Society Generale De
Paris v. Walker, (1885) 11A AC 20, 29].
certificate of shares is evidence to the effect that the allottee is holding a
certain number of shares of the company showing their nominal and paid-up value
and distinctive numbers. This certificate is a prime facie evidence of
title to the shares in the possession of shareholders. [Society Generale De
Paris v. Walker, (1885) 11A AC 20, 29].
Moreover,
when the company issues a certificate, it holds that the facts contained
therein are true. Any person acting on the faith of the share certificate of
the company, can compel the company to pay compensation for any damage caused
by reason of any misstatement in the share certificate as the company is bound
by any statements made in the certificate.
when the company issues a certificate, it holds that the facts contained
therein are true. Any person acting on the faith of the share certificate of
the company, can compel the company to pay compensation for any damage caused
by reason of any misstatement in the share certificate as the company is bound
by any statements made in the certificate.
Share
certificate is the only documentary evidence of title and that the share
certificate is a declaration by the company that the person in whose name the
certificate is issued is a shareholder in the company. [Ghanshyam
Chhaturbhuj v. Industrial Ceramics (Pvt.) Ltd. (1995) 4 Com LJ 51].
certificate is the only documentary evidence of title and that the share
certificate is a declaration by the company that the person in whose name the
certificate is issued is a shareholder in the company. [Ghanshyam
Chhaturbhuj v. Industrial Ceramics (Pvt.) Ltd. (1995) 4 Com LJ 51].
Under
Section 56(4) of the Act, every company, unless prohibited by any provision of
law or any order of any Court, Tribunal or other authority must deliver the
certificates of all securities allotted, transferred or transmitted:-
Section 56(4) of the Act, every company, unless prohibited by any provision of
law or any order of any Court, Tribunal or other authority must deliver the
certificates of all securities allotted, transferred or transmitted:-
(a) within a period of two months from the date of
incorporation, in the case of subscribers to the memorandum;
incorporation, in the case of subscribers to the memorandum;
(b) within a period of two months from the date of
allotment, in the case of any allotment of any of its shares;
allotment, in the case of any allotment of any of its shares;
(c) within a period of one month from the date of
receipt by the company of the instrument of transfer or, as the case may be, of
the intimation of transmission, in the case of a transfer or transmission of
securities;
receipt by the company of the instrument of transfer or, as the case may be, of
the intimation of transmission, in the case of a transfer or transmission of
securities;
(d) within a period of six months from the date of
allotment in the case of any allotment of debenture.
allotment in the case of any allotment of debenture.
However,
where the securities are dealt with in a depository, the company shall intimate
the details of allotment of securities to depository immediately on allotment
of such securities. [Proviso to Section 56(4)].
where the securities are dealt with in a depository, the company shall intimate
the details of allotment of securities to depository immediately on allotment
of such securities. [Proviso to Section 56(4)].
Where any default is made in complying with the above provisions,
the company shall be punishable with fine which shall not be less than Rs
25,000 but which may extend to Rs. 5 Lakh and every officer of the company who
is in default shall be punishable with fine which shall not be less than Rs
10,000 but which may extend to Rs.1,00,000. [Section 56(6)]
the company shall be punishable with fine which shall not be less than Rs
25,000 but which may extend to Rs. 5 Lakh and every officer of the company who
is in default shall be punishable with fine which shall not be less than Rs
10,000 but which may extend to Rs.1,00,000. [Section 56(6)]
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