Issue of Shares Certificates by a Company
As per the requirements under the Companies Act, a Limited Company is required to issue and deliver Share Certificates to all the shareholders that are signed and contains particulars as required.
A company will have to issue shares post incorporation for various needs such as for expansion of business, meeting its existing needs etc. Upon allotment of shares, a company is required to issue share certificates to the shareholders as an evidence for the number of shares held by them.
Timeline for Issue of Share Certificates & Debenture Certificate
| Sl. | Category | Timeline for Issue of Share Certificate |
| 1. | Subscribers to Memorandum of Association | Within 2 months from the date Incorporation |
| 2. | Allotment of Shares (Rights Issue / Preferential Issue / Bonus Shares etc) | Within 2 months from the date of allotment |
| 3. | Transfer of Shares or Transmission of Shares | Within 1 month from the date of receipt of documents for Transfer / Transmission |
| 4. | Issue of Debentures | Within 6 months from the date of allotment of Debentures |
Format of Share Certificates
Company has to issue Share Certificates in Form No. SH-1 and the Certificate must contain the Name of the person to whom it is issued along with his folio number and Number of shares, and its distinctive number and Amount paid on those shares.
Signatories of the Share Certificates
The share certificates of a Private Company shall be signed by 2 directors or 1 director & the Company Secretary (if the company has appointed CS). The share certificates of a One Person Company shall be signed by 1 Director & the company secretary or any other person authorized by the Board
Companies having Common seal shall affix the same in the presence of persons required to sign the certificate.
Register of Members
The particulars relating to the share certificates indicating the name, to whom the certificates are issued, date of issue and other details as per section 88 shall be entered in the Register of members.
Stamping of Share Certificate
Share Certificate issued by the Company has to be stamped as per the respective State Stamp Act and Stamp Rules. Stamp Duty on Share Certificate varies state to state. Nonpayment of stamp duty on share certificates shall invalidate the share certificates as such
Penalty for Contravention
If a Company is in default of delivering the share certificates within the period prescribed, the company shall be liable to a fine of Rs.25,000.00 to Rs.5,00,000.00 and every officer in default shall be liable to a fine of Rs.10,000.00 to Rs.1,00,000.00
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