Guidelines for Applying for Duplicate Share Certificates

23 Feb Guidelines for Applying for Duplicate Share Certificates

Posted at 07:41h in Corporate & Allied Laws by
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When a shareholder loses their share certificate, both the shareholder and the company face potential financial repercussions. Under the Companies Act, 2013, and the Companies (Share Capital and Debentures) Rules, 2014, provisions are made for the issuance of duplicate share certificates to mitigate losses for the company and its shareholders. Below, we’ll outline the process for applying for a duplicate share certificate.

Understanding Share Certificates

A share certificate serves as official documentation of a shareholder’s ownership of a company’s shares, providing prima facie evidence of ownership. If a shareholder misplaces or loses their original share certificate, the company can issue a duplicate.

Actions to Take When a Share Certificate is Lost or Misplaced

If a shareholder’s share certificate goes missing, it’s crucial to take the following steps:

  • Notify the company promptly about the lost certificate via letter or email, providing necessary details such as the shareholder's name, folio number, address, and certificate number.
  • The company must halt share transfers for at least 30 days upon receiving notification to prevent fraudulent transfers.
  • Once the shareholder's identity is verified, the company will initiate the process for issuing a duplicate share certificate.

Required Documents for Duplicate Share Certificates

The following documents are typically required:

  • Non-judicial stamp paper indemnity bond agreement
  • Affidavit on non-judicial stamp paper attested by a Notary Public/Special Executive Magistrate.
  • Police report detailing the misplaced share certificate information.
  • Newspaper advertisement addressing the loss or misplacement.
  • Proof of shareholder's identification and residency.

Procedure for Issuing Duplicate Share Certificates

The process involves:

  • Submitting an application to the company along with the necessary documents.
  • The company will review the application and documents before proceeding.
  • Approval for issuing the duplicate share certificate must be obtained from the company's board of directors.
  • The company must comply with specified timelines for issuing the duplicate share certificate.

Importance of Share Certificates

Share certificates serve as crucial evidence of ownership in legal proceedings. They are issued by companies to individuals who purchase shares, ensuring transparency and accountability.

Penalties for Non-Compliance

Failure to adhere to regulations regarding share certificate issuance can result in fines for the company and its officers.

Conclusion

In conclusion, share certificates represent more than just ownership; they are vital documents that should be safeguarded responsibly. Adhering to proper procedures for obtaining duplicate certificates is essential to mitigate financial risks and maintain transparency in shareholder ownership.

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We have taken all steps to ensure that the information on the website has been obtained from reliable sources and is accurate. However, this website is not intended to give legal, tax, accounting or other professional guidance. We recommend appropriate advice be taken prior to initiating action on specific issues.

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