What is Share Certificate
A Share Certificate is a document issued to the shareholders of the company evidencing the number of shares held by him. 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.
Format of Share Certificate
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.
Timelines for issue of Share 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 |
Signatory to Share Certificate
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.
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. Non-payment 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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