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Share certificate

Mayuri Lal (officer CS) (748 Points)

27 February 2012

Dear Members,

A company is incorporated in Maharashtra and if it conducts a Board Meeting in a different state i.e Chhattisgrah for allotment and issue of new shares.

So my querry is if the Board decides to allot new shares in the meeting held in Chhattisgarh then the rate of stamp duty of which state will be applicable ? Maharashtra or Chhhatisgarh?

If it is either of the state then what will be the rate of stamp duty to be affixed on the new certificate.

regrads,

Mayuri Lal

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14 Replies

CS Aditya Agrawal (PCS) (110 Points)
Replied 27 February 2012

Dear Mr. Lal

You may choose the place, wherever the rate of stamp duty is lesser as the companies act is silent on the issue.

Kindly correct me if wrong

Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 27 February 2012

Dear Mr. Lal,

I would advise you to pay stamp duty as per the state Act of chattisgarh. Reason being all major activities like board meeting, allotment and issue of share certificate took place in the state of chattisgarh.

Regards

Ankur

1 Like

Mayuri Lal (officer CS) (748 Points)
Replied 28 February 2012

Thank you Mr. Aditya and Mr. Ankur

I had one more query relating to the date of the share certificate. For instance, if the Company is incorporated on 1st Oct 2011 and the money from the subscribers is deposited through cheque on 5th Nov 2011. So what will be the date which is required to be mentioned in the share certificates.

What will be the rate of stamp duty which should be affixed in the share certificates.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 28 February 2012

Hi,

DATE OF ALLOTMENT TO SUBSCRIBERS AND DATE TO BE MENTIONED ON SHARE CERTIFICATE

As per my understanding 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:

Printing on share certificate of subscribers
as date of Allotment to subscribers
For the purpose of filling the column in register of member to enter the name of subscribers.

Even if you receive the amount from subscribers after 6 months the date of deemed Allotment and date on share certificate would remain the same i.e. date of incorporation of the company.

SOMETHING EXTRA FOR SHARING

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. Appreciate further have you ever filed form-2 for the subscribers? The answer would be No. That itself is a kind of proof that no 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.

Regarding receipt of payment from subscribers I would say ideally such amount should be deposited by the subscribers after incorporation of the co. in the newly opened bank a/c of the company and record the same in the first BM Minutes.

Alternatively, as there is no tracing (as far as ROC is concerned) of such amount, it may be deposited by them later. As a CS i would suggested you should opt I option to avoid any kind of future problem.

In case of any doubt please post it. I’ll definitely try my best to solve it.

Best Regards

1 Like

Mayuri Lal (officer CS) (748 Points)
Replied 29 February 2012

Thank you Mr. Ankur.

I understood as far as issuance of share certificate os concerened to the subscribers.

For the subsequent allotments, what date is to be mentioned on the face of the share certificate.

For ex. if the date of allotment is 1st feb 2012 so it means within 3 months the share certificatees are to be delivered to the shareholders.

So what date is to be mentioned on the face of the share certificate for the aforesaid allotment.

Mayuri Lal (officer CS) (748 Points)
Replied 29 February 2012

Thank you Mr. Ankur.

I understood as far as issuance of share certificate os concerened to the subscribers.

For the subsequent allotments, what date is to be mentioned on the face of the share certificate.

For ex. if the date of allotment is 1st feb 2012 so it means within 3 months the share certificatees are to be delivered to the shareholders.

So what date is to be mentioned on the face of the share certificate for the aforesaid allotment.

SANTOSH SHAH (Company Secretary) (754 Points)
Replied 01 March 2012

Originally posted by : Mayuri Lal
	For ex. if the date of allotment is 1st feb 2012 so it means within 3 months the share certificatees are to be delivered to the shareholders.

Dear Mayuri,

In my view, once allotment is approved the date on share certificate can be the Board Meeting Date or date after that.

Prior to quoting the dates make sure share certificates -stamp duty is paid.

The entire activity of issue of share certificate on allotment be completed within 3 months of allotment.

Other views welcome.

regards

Santosh Shah

Jiten Gupta (Company Secretary) (1693 Points)
Replied 02 March 2012

The companies Act provides that within 3 months from the date of allotement, share certificates shall be delivered. There is no specific date required to be mentioned on share certificates!!

It is to be ahead of allotement but within 3 months from same.!!!

Jiten Gupta (Company Secretary) (1693 Points)
Replied 02 March 2012

Dear Ankur Sir,

Which section of companies act says that we are required to pay stamp duty as per the state in which Board Meeting is held????

Please reply!!!!!!

1 Like

CS Ashutosh Kumar (Associate) (35 Points)
Replied 04 June 2012

@ Mr. Ankur.......How can you determine the place of paying the stamp duty on an assumption that since u r holding your Board Meeting at such palce other than the registered office state? Currently, u might be aware that Stamp Authority Delhi has issue cause notice from 80,000 Companies after getting the information about the allotment of shares from ROC, Delhi. And also they are leving penalty for delay. Their intrepretation is that they have not to tdo anything with the place of the Board Meeting, but they will act as per the registered office of the Company.

Please suggest the provisons for the stamp duty on place basis..

Regards

(Guest)

Hi,

Every shares certificate shall be stamped in terms of the Stamp Act/Rules applicable at the place of execution and issue.

Registered office of company is not relevant for payment of stamp duty on share certificate.

Regards.

CS Ashutosh Kumar (Associate) (35 Points)
Replied 07 June 2012

@ Ms. Neha.....there is no any provision in the Stamp Act or rules regarding the place on which the stamp duty is to be levied on the share certificate. If it has been there then the collector of stamp has not issued notices to the comapnies registered in delhi.

From some source I have come to that:

Since, they are also aware of the fact that there is no such provision on this. So, they are issuing notices to the Comapnies. They are of the view that unless there is no person challenging their notices till then generate revenue for government and self.

However, if u are aware of any such provisions for leving duty then please let us know.

(Guest)

Dear Mr. Kumar,

Pls check point no 24 of the attached file.

Regards/ Neha

Attached File : 206355 992545 stamp duty.pdf downloaded: 133 times

CS Ashutosh Kumar (Associate) (35 Points)
Replied 07 June 2012

Thanks Ms. Neha.

Attached documents also says that, in general the place is of registered office. But the provision for support of statement has not been prescribed. The statement has been written on the basis of the practice adopted by the corporates/ us before the issue of notices by the revenue department, delhi.

Also the Act and the Constitution of India does not say anything on place. Only requirement is to pay stamp duty.

If u have the provisions then please show me. Even I am searching for the provisions to counter the department. Many of my client has received notices in this regard and have paid the duty + penalty + expenses.