Thursday, 6 November 2014

Companies Act 1956: Share Certificate and Share Warrant

Share Certificate and Share Warrant

Share Certificate Section 113
Every company issuing shares must issue share certificate within 3 months of the allotment this period is 2 months where the shares are transferred. In this case if the company commits a default the company and its directors are liable to punishment which may be 2 years imprisonment or fine of Rs. 5000 per day of the default or both.

Section 114 and 115 Share Warrant:
  • Share warrants are bearer instruments and these are issued by any company to the shareholders so that the share warranty holder may easily transfer the shares to some other person.
  • By way of share warrants it becomes easy to transfer the shares because registration of warrants is not required.
  • The warrant holders do not have voting rights and warrant holders cannot attend the meeting of the company. They are not shown in the register of the company.

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