Issue of New Share Certificate

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2010 Hello Frds,

A public company want to reissue all its existing share Certificate so

1 Can it be done by passing board resolution or need members approval

2. Can company give new certificate numbered with 1,2,... or need to continue the old series

3. Can distintive no. be give from starting i.e. 1 onwards or need to continue old series

Pls advice with reference of case or section, if possible

Ankur Garg

Ankur Garg (Expert)
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28 January 2010 Old series may bo continued with new cwerificates. However if U want to start everything a fresh then entire points must be cosidered by the board be passing a board resolution.

Views of other experts solicited.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2010 So it can be issued with fresh series if Board approves the same

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2024 The process for issuing new share certificates, especially in the context of reissuing certificates or replacing old ones, involves several legal and procedural considerations. Here’s how it generally works:

### 1. Board Resolution vs. Members' Approval

**Board Resolution:**
- A public company can reissue share certificates with a board resolution. The board of directors typically approves such changes as part of its fiduciary duties and management of the company's affairs.

**Members' Approval:**
- In some cases, especially when the change is substantial or affects the rights of shareholders, members' approval may also be required. For instance, if the reissue involves changes in the structure of the share certificates or any alteration in the rights of shareholders, you may need to pass a special resolution in a general meeting.

### 2. New Series vs. Old Series

**New Series:**
- The company can issue share certificates with a new numbering series, such as starting from 1 onwards, if the board resolution authorizes this. It’s common to start a new series if the company prefers or if the old series has become disorganized.

**Continuing Old Series:**
- Alternatively, the company can continue the old numbering series if it is more practical or if the reissue is intended to replace lost or damaged certificates without any change in the numbering system.

### 3. Distinctive Numbers

**Starting New Series:**
- The company may issue share certificates with new distinctive numbers starting from 1, especially if there is a reorganization or if it is deemed more practical. This is often done to simplify record-keeping or to modernize the share certificates.

**Continuing Old Series:**
- Continuing the old series is also permissible, particularly if it helps maintain continuity and avoid confusion.

### Legal References and Considerations:

**Companies Act, 2013 (India):**

- **Section 46:** Relates to the issuance of share certificates. It states that every company, except a company limited by guarantee, shall issue a certificate under the company's seal within two months from the date of allotment or from the date of application for the shares.

- **Section 56:** Addresses the transfer and transmission of securities and requires the company to issue new certificates in case of a transfer or consolidation of shares.

**Case Law and Practical Considerations:**

- **In re: The Mill Owners' Association Ltd. (1951):** This case highlights the company’s discretion in issuing new certificates and the need for adherence to company resolutions and procedures.

- **General Practice:** It’s common practice to issue new series numbers when reissuing certificates to avoid confusion, especially when dealing with a large number of shares or if the old certificates are outdated.

### Practical Steps:

1. **Board Resolution:** Pass a board resolution to authorize the reissuance of share certificates and decide on whether to use new or old numbering series.

2. **Document Preparation:** Prepare and issue the new share certificates in accordance with the board’s decision. Ensure that all required legal formalities are followed.

3. **Notify Shareholders:** Inform shareholders about the change and provide them with the new certificates.

4. **Update Records:** Ensure that the company’s records and the share register are updated to reflect the new certificates and their distinctive numbers.

By following these guidelines and ensuring that all legal requirements are met, the company can efficiently reissue share certificates and manage its shareholding records.

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