Certification of share

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Priya (Querist)
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18 July 2012 Dear All

1) My concern is related to understanding the resposnibility in case a transferor submits his a) share certificates along with b) transfer deeds executed with 100 people for 300,000shares to the company under 112 of Co. act.

2) Now the company completes the certification, keeps the share certifcates n returns the transfer deed to transferor with word'certification lodged'.

transferor gives those deeds to 100 transferees n brings its holding to 0 in his books for the company. If the transferee does not submit back those deeds with co., whose responsibily does it become for registration.

Ajay Mishra

Ajay Mishra (Expert)
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18 July 2012 Hi

For transferring of shares to more than one person , following procedure should be followed by the company:

1. Collect original Certificate and share transfer deeds from transferor/transferee properly executed.
2. Split the share certificate as per the transfer details and issue new split share certificates in transferor name.
3. Endorse the name of the transferee on each certificates.
4. call a Board meeting for spliting/registering the transfer.
5. Return the split share certificate to applicant.
6. The co. will keep the original share certificate and transfer deeds.
7. The Transferor will return the split share certificate to the concern transferee.

Regards

Priya

Priya (Querist)
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18 July 2012 Thank you sir for the clarity on the matter.

However, the case here is transferor transferred shares to 800 transferees and the company way back before 3 years returned the all 800 deeds with words
'certifcation lodged' to transferor.

transferor gave them to transferee and asked them to submit the same for issue of new share certificates.

now the transferee hasnt submitted them back. is the company responsible for non compliance of transfer of shares?

Ajay Mishra

Ajay Mishra (Expert)
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18 July 2012 Hi

If the transferor lodged the original share certificate and 800 deeds then u confirm me, whether the company has return the transfer deed to transferor and keep the original share certificate.

Priya

Priya (Querist)
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18 July 2012 Yes, sir.

The company has returned back the deeds to transferor and kept the original certificates with them.

Concern is, transferor says they have nil holding as on date with d co. Though company claims that since the transferees didnt submit back the deeds (which it had returned after certifcation to transferor), n has not issued new certificates, it cannot register transferees names in registers.

Ajay Mishra

Ajay Mishra (Expert)
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18 July 2012 Hi

No need to return the transfer deed it is the property of the company after submitting by the applicant. Your responsibility is only after executing the transfer u return the share certificate. no further paper is required to delivered to applicant.

Ajay Mishra

Ajay Mishra (Expert)
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18 July 2012 Hi

Transferor is right, they have submitted their original certificate and 800 transfer deed with company with proper executed.

Please confirm, why the company has return the transfer deed to transferor after certification.

Priya

Priya (Querist)
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18 July 2012 Sir, apologise for the error.

As per my understanding with the minutes available for the year of transaction, the transferor gave all share certificates and deeds to the company for the CS to put lodgement stamp and then it was sent to transferees for their signatures.

Transferees in turn, were supposed to affix their signatures and stamp and were asked to submit the same with the company.

Hope am able to put my points clearly. Looking forward to your advice. Thanks sir

Ajay Mishra

Ajay Mishra (Expert)
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18 July 2012 Hi

As per ur clarification and my standing, the company will register the transfer only when the instrument of transfer is properly executed, but in this case instrument is not executed(transferee has not submitted the deeds)properly, so the company has no any responsibility to register the same.

As per my knowledge, no registration should be made by the company.

Priya

Priya (Querist)
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18 July 2012 Really appreciate your quick response, sir. Am very thankful for the guidance.

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