A share certificate refers to a document which is issued by a company evidencing that a person named in such certificate is the owner of the shares of the Company as stated in the share certificate. The Indian Companies Act mandates companies for issuing share certificates post their incorporation.

Details to be provided in a Share Certificate

Every share certificate issued in India should contain the below mentioned:

• Name of issuing Company
• CIN no. (Corporate Identification Number) of such Company
• Address of the company’s registered office
• Name of owners of such shares
• Folio number of member
• Number of shares which is represented by such share certificate
• An amount which is paid on such shares
• Distinct number of the shares

Timeframe for issuing Share Certificate

After the incorporation of the company, the company needs to issue the share certificates within two months from the incorporation date. Where additional shares are allotted to the new or existing shareholders, the share certificates should be issued within two months from the allotment date. In a case related to the share transfers, the share certificates should be issued to transferees within a period of one month of receipt of the instrument of transfer by such Company.

Procedures for issuing Share Certificates

• Board Meeting & Allotment of shares - A board meeting is called for deciding about the allotment of shares.
• Register of members - The company secretary then prepares a Register of members from the lists of applications received and allotment sheets.
• Preparing and printing share certificates - The company secretary must arrange the form of the share certificate according to the form suggested by the Articles of Association.
• Intimation and dispatch of Share Certificate - The company secretary needs to inform all the shareholders that share certificates are ready and would be delivered in exchange of allotment letters and bankers receipt confirming payment of the allotment money.
• Penalty for breach in issuance of Share Certificate - Where a company makes any default in complying with provisions relating to issue of share certificates, such company would be punishable with a fine that wouldn’t be less than INR 25,000 but could extend to INR 5,00,000 and every defaulting officer of such company would be punishable with a fine that wouldn’t be less than INR 10,000 but could extend to INR 1,00,000.