Share certificate most important documents that should be issued to shareholder after incorporation of company within prescribe time. A share certificate is also known as financial assets it is documented proof of shareholding in a company which is issued to a shareholder and signed on behalf of incorporation. Share certificate are issued based on assets classes.
Information mentioned in share certificate.
All share certificate issued in India Must contain below mentioned information on share certificate.
The issuing Company name.
CIN Number (Corporate identification number) of company.
Address of company registered office.
Name of such owners buying share of the company.
Folio number of the members.
The number of shares should be represented on share certificate.
Amount invested/paid for such share bought.
Time period for issuing share certificate Section 56 (2)
It becomes mandatory for company to issue share certificate within prescribe time period and time period for issuing certificate depends on various situation are mentioned below.
As per Section 46 Allotment of any share certificate two months from buying the ownership of company / from the date of allotment.
As per Section 56 Sub-section (4) Subscriber to memorandum Two months from the date of company incorporation.
As per Rule (5) of companies Act (Share capital and debenture) Rules 2014, Allotment of debentures six months from the date of allotment.
Procedure for issuing share certificates
- Board meeting And Allotment of shares a board meeting for deciding related to allotment of shares. The Board of directors assigns a committee of directors which is known to be allotment committee. Allotment of share then decided by the allotment committee. Allotment committee issue provides the details report about allotment report to directors then, accordingly directors pass the resolution for allotting shares to respective applicant members. Once shares get allotted, secretory sends letter to the respective members about his allotment of shares certificate.
- Register a member from the list of application received and allotment of sheet, the company secretory prepares register of members. The Aim of preparing register of member is to have proper details of shares holder and number of shares which are allotted to them.
- Preparing and printing share certificate The Company secretory make sure all the details in share certificate draft are as per article of association. The secretory verifies all the details of applicant in share certificate are properly framed as per Companies act 2013.
- Intimation for dispatched of share certificate to members the company secretory inform all the shareholder about their certificate that has been are ready and will be delivered after confirmation of allotment money from their bankers.