Share Certificate not received from Pvt. Ltd. Company

Others 3242 views 4 replies

Niraj

Self Employed

67 Points Joined February 2010

Mr. A invested Rs.20,000/- in CASH as share application money for allotment of equity shares at par in a Pvt. Limited company controlled by one of his close friend and handed over cash alongwith Share Application Form in October 2006 to one of the promotor Director (a close friend of Mr. A). Equity Shares were allotted to Mr. A and Return of Allotment in Form No.2 was filed by the company in December 2006 showing name of Mr. A as one of the allottee. Mr. A is holding 5% equity share capital of the company and name of Mr. A as a shareholder is also shown in the Annual Returns filed by the company till date.

As normally happens in Private Limited companies, no cash payment receipt was issued to Mr. A by the company and also no share certificate was handed over to Mr. A by the company. Mr. A has no proof of having invested Rs.20,000/- in the company except copies of Form No.2 and Annual Returns of the company. Now Mr. A is not on speaking terms with the companies directors and accordingly can not ask for the Share Certificate from them.

Please suggest as to what action Mr. A should take for getting original or duplicate share certificate from the company.

Thanks

Replies (4)

Sonam Bidasaria

770 Points Joined July 2008

As per Sec 84(2) A certificate, may be renewed or a duplicate of a certificate may be issued if such certificate -

(a) is proved to have been lost or destroyed, or

(b) having been defaced or mutilated or torn is surrendered to the company.

and Sec 84(3) If a company with intent to defraud renews a certificate or issues a duplicate thereof, the

company shall be punishable with fine which may extend to ten thousand rupees and every

officer of the company who is in default shall be punishable with imprisonment for a term which

may extend to six months, or with fine which may extend to ten thousand rupees, or with both.

Accordingly, the Mr. A should approach to the Company or drop a letter at the REgistered Office of the Company in personal regarding the issue of duplicate certificate and should also give a brief detail regarding the consequences of not issuing the certificate.

List of shareholders containing name and address of Mr. A attached in Annual Return and Identity and Address proof of Mr, A should be enclosed with the request lettter.

Niraj

Self Employed

67 Points Joined February 2010

Thanks CA.Sonam for your reply. Is there any time limit within which the company has to issue share certificate to the allottee shareholder? The company has no proof of handing over share certificate to Mr. A. What are the consequences against the company and directors for not handing over share certificate? Please also note Mr. A has no proof of having invested Rs.20,000/- in the company except copies of Form No.2 and Annual Returns of the company.

Please reply

Sonam Bidasaria

770 Points Joined July 2008

No time limit has been prescribed for issue of shares certificates.

Sec 84(3) If a company with intent to defraud renews a certificate or issues a duplicate thereof, the

company shall be punishable with fine which may extend to ten thousand rupees and every

officer of the company who is in default shall be punishable with imprisonment for a term which

may extend to six months, or with fine which may extend to ten thousand rupees, or with both.

Niraj

Self Employed

67 Points Joined February 2010

Originally posted by : Sonam Bidasaria
	No time limit has been prescribed for issue of shares certificates. Sec 84(3) If a company with intent to defraud renews a certificate or issues a duplicate thereof, the company shall be punishable with fine which may extend to ten thousand rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both.

Dear Sonam,

I came to know from one of my friend that the maximum time limit for issuance of share certificates is 3 months as per Sec-113 of the companies Act. Is this true? If yes, than what are the penal provisions against the company and directors and what action Mr. A should take in this situation. Please clarify & advise.

Thanks