♦ It is an acknowledgment of the shares issued to the shareholder
♦ It contains the details about the class of shareholder, distinctive number of share and amount paid on the share.
A share certificate must be issued within 3 months after the allotment of the shares or 2 months after the application for the registration of the transfer. It contains the following details →
Name of the company
Name and address of shareholder
Share certificate number
Stamp and signature of two directors and counter signature of the company secretary
In case of loss a duplicate share certificate is issued. In case of fraud issue of certificate there is a fine up to Rs. 10,000 and imprisonment up to 6 months.
Format of a Share Certificate :
Definition – A Share Warrant is a document issued under the common seal of the company stating that the bearer has the number of shares specified there in it is a negotiable instrument and it can be transferred by mere delivery.
♦ A Public Company limited by shares can issue share warrant if they are fully paid up.
♦ It can be only issued if there is a provision in articles of association for issuing share warrant.
♦ It requires approval of Central Government before it is issued.
♦ A private Company cannot issue a share warrant.
♦ The bearer of the Warrant is not a member of the company.
♦ It does not contribute towards qualification shares held by the directors.
♦ It can be transferred but it does not require any stamp duty.
Difference between Share Certificate and Share Warrant