Certificate of shares
📚 Law Minded summary
A share certificate is the company's formal proof of who owns what.
It has to be issued under the common seal or signed by two directors, and it names the member, the shares and how much has been paid on them. In law it is prima facie evidence of ownership.
Issuing a duplicate certificate fraudulently is treated seriously — the company faces a heavy fine and the officers responsible face the fraud punishment under section 447.
(1) A certificate, 1[issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary], specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares.
(2) 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.
(3) Notwithstanding anything contained in the articles of a company, the manner of issue of a certificate of shares or the duplicate thereof, the form of such certificate, the particulars to be entered in the register of members and other matters shall be such as may be prescribed.
(4) Where a share is held in depository form, the record of the depository is the prima facie evidence of the interest of the beneficial owner.
(5) 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 com pany who is in default shall be liable for action under section 447.