STAMP DUTY
This query is : Resolved
26 May 2009
I AM IN PVT LTD COMPANY. 6 MONTHS BACK WE HAVE ISSUED SOME SHARES OF 1,00,000/- TO A MEMBER. NOW WE HAVE TO SPLIT THOSE SHARES INTO 4 PARTS OF 25,000/- EACH. WHAT IS THE PROCEDURE ?? ITS QUIET URGENT PLEASE..
27 May 2009
To split the shares you have to cancel the share certificate earlier allotted to the shareholder.For that purpose you have to pass a board resolution to cancel the existing share certificate and issue new certificates by spliting it in the proportion desired by the company.
27 May 2009
THANK YOU.
SOME MORE DOUBTS:
1. DO WE NEED CONSENT / SIGNATURE FROM SHAREHOLDER TO CANCEL THE CERTIFICATE?
2. DO WE NEED TO PAY STAMP DUTY AGAIN FOR THE SPLIT SHARES??
3. HOW TO DOCUMENT THIS IN SHARE LEDGER?
QUIET URGENT...
SOME MORE DOUBTS:
1. DO WE NEED CONSENT / SIGNATURE FROM SHAREHOLDER TO CANCEL THE CERTIFICATE?
2. DO WE NEED TO PAY STAMP DUTY AGAIN FOR THE SPLIT SHARES??
3. HOW TO DOCUMENT THIS IN SHARE LEDGER?
QUIET URGENT...
25 July 2025
Here’s how to address your doubts about splitting shares in your Pvt Ltd company:
---
### 1. Consent/Signature from Shareholder to Cancel Existing Share Certificate
* **Yes**, it is best practice to obtain a written consent or an indemnity from the shareholder before canceling the existing share certificate.
* This protects the company from any future disputes regarding the cancellation.
* Usually, the shareholder signs a letter surrendering the old certificate when receiving the new split certificates.
---
### 2. Stamp Duty on Split Share Certificates
* Stamp duty is **usually payable only once** at the time of original issuance of share certificates.
* **No additional stamp duty is required on splitting shares** if the face value remains the same and it’s just splitting the existing shares into smaller denominations.
* However, do check the applicable **State Stamp Act** for your jurisdiction to be sure. In most states, split or duplicate certificates attract **nominal or no stamp duty**.
---
### 3. Documenting the Split in Share Ledger
* In your **share transfer/register ledger**, record:
* Cancellation of the old share certificate number(s) with details (number of shares, date of issue).
* Issuance of new share certificate(s) with split shares, their numbers, and dates.
* Pass a **board resolution** approving the split and issuance of new certificates.
* Ensure the **shareholder’s details remain the same**, only share certificate numbers and share amounts split accordingly.
---
### Summary of Steps:
1. Pass Board Resolution approving share split and cancellation of old certificates.
2. Obtain shareholder’s consent/surrender letter for old certificates.
3. Cancel old certificates in records and issue new split certificates.
4. Update share ledger/register accordingly.
5. No additional stamp duty required in most cases.
---
If you want, I can help you draft the **board resolution** or the **shareholder consent letter** for this process!
---
### 1. Consent/Signature from Shareholder to Cancel Existing Share Certificate
* **Yes**, it is best practice to obtain a written consent or an indemnity from the shareholder before canceling the existing share certificate.
* This protects the company from any future disputes regarding the cancellation.
* Usually, the shareholder signs a letter surrendering the old certificate when receiving the new split certificates.
---
### 2. Stamp Duty on Split Share Certificates
* Stamp duty is **usually payable only once** at the time of original issuance of share certificates.
* **No additional stamp duty is required on splitting shares** if the face value remains the same and it’s just splitting the existing shares into smaller denominations.
* However, do check the applicable **State Stamp Act** for your jurisdiction to be sure. In most states, split or duplicate certificates attract **nominal or no stamp duty**.
---
### 3. Documenting the Split in Share Ledger
* In your **share transfer/register ledger**, record:
* Cancellation of the old share certificate number(s) with details (number of shares, date of issue).
* Issuance of new share certificate(s) with split shares, their numbers, and dates.
* Pass a **board resolution** approving the split and issuance of new certificates.
* Ensure the **shareholder’s details remain the same**, only share certificate numbers and share amounts split accordingly.
---
### Summary of Steps:
1. Pass Board Resolution approving share split and cancellation of old certificates.
2. Obtain shareholder’s consent/surrender letter for old certificates.
3. Cancel old certificates in records and issue new split certificates.
4. Update share ledger/register accordingly.
5. No additional stamp duty required in most cases.
---
If you want, I can help you draft the **board resolution** or the **shareholder consent letter** for this process!
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- Capital gain from sale of house property
- TDS on Purchase of Immovable Property by NRI from NRI
- Stamp Paper for partnership firm change new income tax 2025
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Value of property in capital gain
- Regarding TDS Applicability For Director Remuneration
- FORM 26A APPLICABILITY
- SFT Cash Deposit in Current Account
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
