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Discussion > Corporate Law >

DATE ON THE FACE OF SHARE CERTIFICATES

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Company Secretary


[ Scorecard : 7347]
Posted On 19 August 2009 at 17:21 Report Abuse

When a company issues / allotes shares to the shareholders what is the date coming on the face of share certificate?

Suppose  a company makes allotment of shares on 01.08.2009, prepares share certificate on 20.08.2009 and affix common seal and get it signed on 25.08.2009.

Then what will be the date coming on the FACE OF share certificate mentioning :

DATED          THIS                    DAY OF                            2009

Will this date be the date on which directors signed the share certs or the date of allotment of shares ?

Pls reply.

 

With Regards

 

CS NEHA JAIN

 

 


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Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 103543]
Posted On 19 August 2009 at 19:03

Hi,

DATE OF ALLOTMENT TO SUBSCRIBERS AND DATE TO BE MENTIONED ON SHARE CERTIFICATE

Date of allotment to subscribers will be the date of incorporation of the company and the same date will also be used for printing on share certificate to be issued to subscribers.

Practically & legally this is very much possible. To conclude you may use Date of Incorporation of the company for the purpose of:
4. Printing on share certificate of subscribers
5. as date of Allotment to subscribers
6. For the purpose of filling the column in register of member to enter the name of subscribers.

Even if you receive the amount from subscribers after 6 months the date of deemed Allotment and date on share certificate would remain the same i.e. date of incorporation of the company.

Hence, view taken by various members that they become shareholders only when they pay for the shares and shares are allotted to them is incorrect in my opinion & as per the discussion above.

In case of any doubt please post it. I’ll definitely try my best to solve it.

Best Regards
 



Total thanks : 1 times




CS Ekta
Company Secretary


[ Scorecard : 289]
Posted On 20 August 2009 at 11:04

Hi Ankur,

Please also clarify what should be the date on  the share cert. in respect of the allotment made subsequent to the incorporation?

Regards 




P C Agrawal
Company Secretary


[ Scorecard : 4267]
Posted On 20 August 2009 at 12:46

Dear Mr Ankur,

 

Thanks for your clarification.  However, I would like to differ from you on the issue of date of signing.  There is no dispute on the fact that the subscribers become members of the company by operation of law on the date of incorporation itself, irrespective of the fact that subscripttion money is paid by them later on.  However, the query here is about the date of share certificate.  It may be noted that in the form of share certificate there is no provision for mentioning the date on which the holder became member of the company.  The format of share certificate provides for only the date when the certificate is actually signed on behalf of the company in pursuance of Board resolution.   Certificate cannot be issued without authority of the Board and use of common seal.  In the first Board meeting held after incorporation resolution will have to be passed for adoption of common seal and authorising someone to sign the certificates on behalf of the company.  Hence date of issue of certificate cannot be date of incorporation itself.

 

It does not make any difference whether the certificate is issued to the subscribers or to the new allottees.  The date when the certificate is actually signed is required to be mentioned in the certificate.  In the above case, the date to be mentioned will be 25.8.2009.  Hope you will agree.

 

Regards,

 




Neha Jain
Company Secretary


[ Scorecard : 7347]
Posted On 20 August 2009 at 13:11

 

Thanks Ankur Sir for your perfect reply.

But i have a doubt regarding the allotment which is made after the company is incorporated.

I will illustrate this with an example:

Company was incorporated on 01.04.2007 with paid up capital of Rs. 1.00 Lacs.

Later it makes allotment on 01.08.2008 of Rs. 5.00 Lacs to 5 persons. Board Resolution for giving authority to issue share certs is passed on on 15.08.2008 and directors and authorised signatory signed the share certs on 20.08.2008.

Now my Question is
what will be the date coming on the share certificate

1. will that be the date of allotment i.e. 01.08.2008 for which form 2 has been filed

2. date of board resolution in which authorisation to directors and authorised signatory to sign the share certs was given i.e. 15.08.2008

OR
3. the date of signing of share certs by the directors / autho signatory i.e. 20.08.2008

To conclude, my Query pertains to share certs when allotment is made by filing form 2 after the company is incorporated.

I trust i am able to explain my query in a legible way.

In case of any doubt please post it.

With Regards

Neha Jain nehajaincs @ gmail.com




Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 103543]
Posted On 21 August 2009 at 17:39

Hi Neha,

 

Your query is very much clear to me.

 

Kindly appreciate you don’t have to hold 2 BMs regarding allotment i.e. on 01.08.2008 and 15.08.2008 as you have mentioned.

 

In the same meeting of 01.08.2008 when you pass allotment resolution then only you can pass resolution to authorise some one for signing share certificate.

 

Further if you have already pass the resolution to authorise some one for signing share certificate in the first BM itself then in that case you don’t have to pass it again & again at the time of next allotment.  

 

Appreciate further the date on share certificate signifies the date on which certificate issued and not the date on which share certificate signed hence in this way I disagree with Mr. Agarwal.pc 

 

PRESENT SITUATION

 

In the present case you have pass a specific resolution on 15.08.2008 hence date of share certificate can not be earlier then 15.08.2008. You may use the exact date on certificate. To elaborate further you may issue the certificate up to 31.10.2008 i.e. with in 3 months of allotment. In other words you can put any date between 15.08.2008 to 31.10.2008 on your share certificate.

 

(Suppose share certificate is signed on 15.08.2008 and handover to shareholder on 15.10.2008 then what is the problem? No problem at all as who know the exact signing date. As long as you are complying section 113 everything is fine.)

 

Reason being as per section 113 company shall with in 3 months after allotment of shares deliver the share certificate to the shareholder.

 

Suppose if you have already passed the resolution to authorise some one for signing share certificate in the first BM itself then you can put any date between 01.08.2008 to 31.10.2008 on your share certificate i.e. full 3 months as per section 113.

 

BEST PRACTICE

 

Pass a one time resolution to authorise some one for signing share certificate in the first Board meeting along with other resolutions.

 

Benefit of passing this resolution:

 

  1. You don’t have to pass authorisation resolution again & again at the time of each and every allotment.
  2. Simply pass allotment resolution in board meeting and issue share certificate to allottee with in 3 months after allotment of shares as per section 113.

 

 

Note: In case of change of signatory you have to pass a separate resolution to sign share certificate.

 

If you still have any doubt please post it.

 

Best Regards

 




Neha Jain
Company Secretary


[ Scorecard : 7347]
Posted On 21 August 2009 at 17:53

Ankur Sir, Thanks for your detailed reply regarding my query. It really helped me to understand the point.

BUT pl let me know if as suggested by you we have only two dates i.e. 01.08.2008 for allotment and 20.08.2008 for signing of share certs by directos and autho sign, whether

I SHOULD TAKE DATE OF ALLOTMENT 01.08.2008  OR DATE OF SIGNING  20.08.2008 ON THE SHARE CERTIFICATE ?

Pl reply

 




Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 103543]
Posted On 21 August 2009 at 17:57

As mentioned in my reply simply allot share on 01.08.2008 and put the same date on share certificate and handover certificate to allottee any time between 01.08.2008 to 31.10.2008. But the same is possible only when you have signing authorisation resolution to support you.




Ankur Garg
Company Secretary and Compliance Officer


[ Scorecard : 103543]
Posted On 21 August 2009 at 18:00

Alternatively you may do one thing=== In the same BM on 01.08.2008 first pass board resolution for allotment and then pass second resolution for authorise some one to sign share certificate and use the same date on share certificate.

 




P C Agrawal
Company Secretary


[ Scorecard : 4267]
Posted On 24 August 2009 at 16:58

One query here pl.  If shares are allotted on 1.8.09 and franking for stamp duty is done on say 7.8.2009, can the certificate still bear the date 1.8.2009?  Stamp Act provides that duty must be paid on or before execution of the document.  Share certificate being one instrument, can we date it prior to the date of franking?  Pl. clarify.

 

Regards,

 



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