ISSUANCE OF DUPLICATE SHARE CERTIFICATE IN INDIA
Share Certificates issued to the Companies are sometimes due to some unforeseen circumstances lost or misplaced by the Shareholders. The loss of Share Certificates can lead to huge financial loss to Shareholders as well as the Company. To avoid any unnecessary loss to the Shareholders and the Company, the remedy is provided by the Central Government. The Companies Act, 2013, provides for the provisions for Issue of Duplicate Share Certificate under section 46 read with Rule 6 of the Companies (Share Capital and Debentures) Rules, 2014 in case the original Share Certificate is lost or misplaced by the Shareholder.
What is a Share Certificate?
Company issues a Share Certificate to certify that from the date on which a certificate is issued to a person, the person is the registered owner of the Shares of the Company. Share Certificate issued by Company is the prima facie evidence of title of the member to the Shares of the Company. The Share Certificates proved ownership of the person in the Company. The loss and misplacement of the Share Certificate will affect the Shareholder financially, as there will be no proof of his/her ownership. The Company issues the Duplicate Share Certificate in case the original is lost or misplaced.
Steps to be taken by Shareholders
Shareholders should take the following steps after the loss or misplacement of Share Certificate:
- The Shareholder should immediately inform about the lost or misplaced Share Certificate to the Company.
- The communication of the information can be done through a letter to the address of the Company, or an email can be sent to the Company.
- The details of the lost or misplaced Share Certificate like Name, Address, Folio Number, and Share Certificate Number.
Steps to be taken by Company
The Company should take the following steps after loss or misplacement of Share Certificate:
- Once the information is received of the lost or misplaced Share Certificate, the Company should freeze the transfer for at least 30 days to prevent any fraudulent transfer or illegal proceeding of the transfer.
- After completing the procedure, the entity should guide the Shareholder for the Issue of Duplicate Share Certificate once the Shareholder’s identity is established
Duplicate Share Certificates may be issued in 2 cases:
1. When Share Certificate, is proved to have been lost or destroyed; or
2. When Share Certificate, has been defaced, mutilated or torn and is surrendered to the company.
CASE 1: When Share Certificate is Lost or Destroyed:
Step 1: Shareholder should file the F.I.R with the police with full information on the lost Share Certificate.
Step 2: Shareholder to submit:
a. the Request Letter to the Company which should include Name, Address, Folio Number, Distinctive No. and Share Certificate Number for issuing Duplicate Share Certificate along with the supporting evidence.
b. Indemnity Bond on Non-Judicial Stamp Paper of Rs.100.
c. Copy of FIR filed.
Step 3: Company to take approval from the Board of Directors (by passing the resolution) for the issue of Duplicate Share Certificate.
Step 4: Duplicate share Certificate to be issued.
Step 5: Particulars of duplicate share certificates issued shall be recorded in Form No. SH-2.
CASE 2: When Certificate is defaced, mutilated or torn and is surrendered to the company:
Step 1: Shareholder to submit the Request Letter (Request Letter should include indemnity clause) to the Company which should include Name, Address, Folio Number, Distinctive No. and Share Certificate Number for issuing Duplicate Share Certificate along with the Original Share Certificate or any evidence showing that the Certificate is in the name of person claiming the Shares.
Step 2: Company to take approval from the Board of Directors for the issue of Duplicate Share Certificate.
Step 3: Duplicate share Certificate to be issued. Step 4: Particular duplicate share certificates issued shall be recorded in Form No. SH-2