In last post, we discussed certificate of share and procedure for issuing fresh share certificates. Sometime, a company need to renew a certificate or issue a duplicate one.
According to Section 46 discussed earlier here, a duplicate certificate of shares may be issued, if such certificate —
(a) is proved to have been lost or destroyed; or
(b) has been defaced, mutilated or torn and is surrendered to the company.
If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under Section 447.
Rule 6 of the Companies (Share Capital and Debentures) Rules 2014 discusses issue of renewed or duplicate certificate.
Certificate in lieu of old Certificate:
The certificate of any share or shares shall not be issued either:
(a) in exchange for those which are sub-divided or consolidated, or
(b)in replacement of those which are defaced, mutilated, torn or old, decrepit, worn out, or where the pages on the reverse for recording transfers have been duly utilised,
unless the certificate in lieu of which it is issued is surrendered to the company.
The company may charge such fee as the Board thinks fit, not exceeding fifty rupees per certificate issued on splitting or consolidation of share certificate(s) or in replacement of share certificate(s) that are defaced, mutilated, torn or old, decrepit or worn out.
Statement on Face of Certificate:
Where a certificate is issued in any of the circumstances specified in this sub-rule, it shall be stated on the face of it and be recorded in the Register maintained for the purpose, that it is “Issued in lieu of share certificate No….. sub-divided/replaced/on consolidation” and also that no fee shall be payable pursuant to scheme of arrangement sanctioned by the High Court or Central Government.
Issue of share certificate rule:
A company may replace all the existing certificates by new certificates upon sub-division or consolidation of shares or merger or demerger or any reconstitution without requiring old certificates to be surrendered subject to compliance with clause (a) of sub-rule (1) rule 5, sub-rule (2) of rule 5 and sub-rule (3) of rule 5. We have discussed Rule 5 earlier here.
Duplicate Certificate for lost Certificates:
The duplicate share certificate shall be not issued in lieu of those that are lost or destroyed;
(a) without the prior consent of the Board, and
(b) without payment of such fees as the Board thinks fit, not exceeding rupees fifty per certificate, and
(c) on such reasonable terms, such as furnishing supporting evidence and indemnity and the payment of out-of-pocket expenses incurred by the company in investigating the evidence produced.
Where a duplicate certificate is issued, it shall be stated prominently on the face of it and be recorded in the Register maintained for the purpose, that it is “duplicate issued in lieu of share certificate No……” and the word “duplicate” shall be stamped or printed prominently on the face of the share certificate.
Time Period for duplicate certificate:
In case unlisted companies, the duplicate share certificates shall be issued within a period of three months from the date of submission of complete documents with the company.
In case of listed companies, the duplicate share certificate shall be issued within a period of fifteen days, from the date of submission of complete documents with the company.
Register of Renewed and Duplicate Share Certificates:
The particulars of every share certificate issued shall be entered forthwith in a Register of Renewed and Duplicate Share Certificates maintained in Form SH – 2 indicating against the name(s) of the person(s) to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross-references in the “Remarks” column.
The register shall be kept at the registered office of the company or at such other place where the Register of Members is kept and it shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose.
All entries made in the Register of Renewed and Duplicate Share Certificates shall be authenticated by the company secretary or such other person as may be authorised by the Board for the purposes of sealing and signing the share certificate under the provisions of sub-rule (3) of rule 5.
Form SH – 2:
This register shall contain following particulars:
- Folio No.
- Name of person(s) to whom Renewed / Duplicate Share Certificate is issued
- Date of Approval of issue of Renewed/ Duplicate Share Certificate
- Class of Share
- Date of issue of original share certificate
- Original share certificate number
- Total number of shares in the original Share Certificate
- Distinctive number of shares
- Date of issue of Renewed / Duplicate Share Certificate
- Reasons for issued of Renewed / Duplicate Share Certificate
- Number of Renewed share certificate
- Total number of shares in the Renewed / Duplicate Share Certificate
- Reference to entry in Register of Member
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