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Delay in Share certificate issue

tarry (fgsdfg) (34 Points)

12 October 2009

Please suggest some way out:

A company alloted preference shares on 31st march 2009 on a right basis to existing equity shareholderers. The company neither issued allotment letter nor share certificate to the pref. share holders till october 2009.

As per section 84 share certificates should be issued withinn 3 months.

Now can the company issue cetificates without attracting penalty.

What wou;ld be the scenario if the company would have issued allotment letter say in april / may 2009

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6 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 12 October 2009

Hi,

Issue of share certificate is governed by section 113. On issue of share certificate reporting to ROC or any authority is not required particularly in case of private and unlisted public company.

Hence you can later on issue share certificate with the correct date. Date of issue should be with in 3 months of allotment of pref shares in accordance with section 113. However your pref shareholders can object. Try and convince them.

Regards

tarry (fgsdfg) (34 Points)
Replied 14 October 2009

Originally posted by :Ankur Garg
"	Hi, Issue of share certificate is governed by section 113. On issue of share certificate reporting to ROC or any authority is not required particularly in case of private and unlisted public company. Hence you can later on issue share certificate with the correct date. Date of issue should be with in 3 months of allotment of pref shares in accordance with section 113. However your pref shareholders can object. Try and convince them. Regards	"

Lots of thanks for the reply.

But as share certificate needs to be stamped before issue, and in this case even if you issue the certificate on the correct date, how the stamping will take place.

thanks in anticiaption..................

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 14 October 2009

Common seal of the company needs to be affixed on share certificate. Kindly appreciate there will be no date on common seal. So your problem solve automatically.

Revert if there is any doubt.

tarry (fgsdfg) (34 Points)
Replied 15 October 2009

Dear Ankur

The issue is not of fixation of common seal but as you know that stamp duty (thru franking ) is required to be paid on issuance of shares. My question is how this stamp dusty (Indian stamp Act) will be paid.

Thanks for tracking this.........................................