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SHARE CERTIFICATE

03 August 2009

HI FRIENDS,

A PRIVATE LTD COMPANY INCORPORATED IN 2005 HAS ISSUED SHARES TO MEMBERS BY WAY OF SUBSCRIBTION TO MEMORANDUM AND ARTICLES OF ASSOCIATION AND FILING OF FORM 2, , BUT HAS NOT ISSUED SHARE CERTIFICATE IN PHYSICAL FORM. DEMAT - NOT APPLICABLE. NOW THE COMPANY WANT TO ISSUE PHYSICAL SHARE CERTIFICATE TO MEMBERS. IF I PAY THE STAMP DUTY ON THE SHARES ON TODAY'S APPLICABLE RATE AND ALLOT THE SHARES BACKDATED I.E. FROM 2005, IT IS VALID. WHAT IS THE PROCEDURE FOR PAYING STAMP DUTY ON THE SHARE CERTIFICATES TO BE ISSUED? PLEASE ADVICE.

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20 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 03 August 2009

Hi,

Subscribers of MOA are deemed shareholders of the company. They don't need to take shares. As soon as they subscribe the MOA & file it with ROC along with other incorporation documents they become the members as well as shareholders of the company. No formal allotment is required to be made to the subscribers.

Form-2 is not required to be filed for subscribers hence no formal allotment is required in case of subscribers. They are deemed members and shareholders of the Company.

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:

1. Printing on share certificate of subscribers

2. as date of Allotment to subscribers

3. For the purpose of filling the column in register of member to enter the name of subscribers.

Best Regards

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 03 August 2009

In addition to the comments of Shri Ankur Garg

On issue of share certificate no STAMP DUTY is required to be paid. Every share certificate should bear a revenue stamp of Re. 1 and a common seal engraved on it. And signed by 2 directors and a authorised signatory / company secretary. No share certificate is valid without it.

Thus, the date of issue of certificate would be the date of incorporation of the Company.

Ekta (Practicing CS) (423 Points)
Replied 03 August 2009

Sir, but in Gujarat, it was Rs.2 per certificate and revised stamp duty is 0.1% that is, One rupee for every one thousand rupees of the face value of certificate. isn't it???

Please correct me if I m wrong.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 04 August 2009

Dear Ekta,

Yes, you are absolutely right. Revenue Stamp to be affixed Re. 1 for every one thousand including premium. (i.e. issue value)

Rahul Chobdar (Chartered Accountant (Financial Management)) (561 Points)
Replied 04 August 2009

Knowledge enriching . . . . .

1 Like

Deepak Goyal (Company Secretary) (31 Points)
Replied 04 August 2009

Yes, we can affix the revenue stamps but in case of consolidated share certificate where stamp duty is more or where it is not feasible to affix the revenue stamps, the same has to be deposited with the Collector of Stamps(as in Delhi) and in this particular case some nominal penalty will be imposed in order to regularise the late issue of certificate

CS MD Osman Akthar (Company Secretary & CA(Final)) (78 Points)
Replied 04 August 2009

Dear Friends,

! , Date of allotment for subscripttion of MoA&AoA is Date of incorporation OK, but what if the Bank A/C of company is opened after 15 days of in corporation? What if the Subscribers not paid any amount towards subscripttion? ,,,,

CS GK Murty (Company Secretary) (225 Points)
Replied 04 August 2009

Practically, bank a/c is opened after the incorpn only...then where's the prob? Minimum paid up capital in case of PVT Ltd cos. as per co. act, is Rs. 1 lac while that stands at Rs. 5 lac in case of Pub ltd cos. If that be the case, then presume no pvt co. would have been formed...

CS GK Murty (Company Secretary) (225 Points)
Replied 04 August 2009

khushboo (CS) (234 Points)
Replied 04 August 2009

IF THE SHARE CERTIFICATE ARE TORN THEN CAN IT POSSIBLE TO ISSUE DUPLICATE SHARE CERTIFICATE IN LIEU OF OLD CERTIFICATE.

AND DO WE HAVE TO PAY STAMP DUTY ON THT DUPLICATE SHARE CERTIFICATE???

IF NO THEN WHAT IS THE EVIDENCE ABOUT PAYMNET OF STAMP DUTY ON ORIGINAL SHARE CERTIFICATE COZ THEY ARE TORN AND AFTER SURRENDER OF ORIGINAL SHARE CERTIFICATE THEY WLL BE DESTROYED BY THE COMPANY.

????

PLZ LET ME KNW ABT THT AS SOON AS U CAN

CS MD Osman Akthar (Company Secretary & CA(Final)) (78 Points)
Replied 05 August 2009

Dear Krish,

Its true that bank account will opened after incorporation only, but its not compulsorily to be opened immediately after incorporation and more ever the inflow of cash may not be immediately after opening of bank account.

To the above chain of discussion I would like to add one more point that is "allotment date should be the date on which we receive any amount from the subscriber even though its not in full value". if company not recieved any money from a subscriber then company can not issue share certificate to them.,,,

(Guest)

No, It is not Valid.

The Stamp Duty must be paid at the Time of Issuing the Share Certificates

--------

Ankur Shah(PCS)

“Guru Gautam” Bungalow, Inside Parshwa Tower,

Nr. Shyamal Cross Road, 132ft. Ring Road,

Satellite, Ahmedabad – 15

Contact: +91-9427633901

E-mail: ankurjewel @ gmail.com

Blog: csankur @ blogspot.com

veena vaidya (cs) (42 Points)
Replied 05 August 2009

Hi friends,

Co issued shares in 2006 through further issue by efiling form 2- return of allotment. however, it did not print share certificate . now the share certificates are to be printed and alloted to share holders. stamp duty has to be paid i..e 2009 on blank share certificates before formal allotment.

i would like to know the impact of stamp duty paid at today's date i..e4th Aug, 2009 on share certificate to be alloted back dated i.e. 3rd Jan 2006. how far is it valid. what is the remedy?

Malav Shah (Company Secretary and AVP Legal) (171 Points)
Replied 05 August 2009

Hi Veena

You can pay stamp duty plus penalty interest applicable. If you pay normal duty then it would be violation of Stamp Act. You have to pay penalty on the stamp duty applicble as applicable in your state. This will regularise whole thing.

Regards

Malav