Tag Archives: Share Certificates

Share Certificate and Family Company


Away from strictly legal structure know to us, we students of Indian corporate laws know specific classes of companies  – Husband-wife company, Family company, friends basically, and company – “basically partnership” etc. Nothing is defined but all these terms. The basic character of these companies is the utmost trust and faith at the time of incorporation. Due to this, we receive specific queries like:

Is it mandatory to issue a share certificate if both/all the directors are shareholders?

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SHARE CAPITAL (Companies Act, 2013)


We have discussed earlier post The Company under the Companies Bill 2012 which is still relevant when the bill become Act; all companies do not have share capital. Only companies limited by shares have share capital.

KIND OF SHARE CAPITAL (SECTION 43):

The share capital of companies limited by share shall be of two kinds, namely;

(a)  equity share capital;

(b) Preference share capital.

Here, use of two terms “Shall be” and “and” denote this is a requirement to have both kind of share capital but, according to further reading, company may have zero equity or preference share capital.

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