Issue of duplicate share certificates

Standard

A duplicate certificate of shares may be issued, if such certificate —

(A) is proved to have been lost or destroyed; or

(B) has been defaced, mutilated or torn, or old, decrepit, worn out, or where the pages on the reverse for recording transfers have been duly utilized and is surrendered to the company.

A. Procedure of issue of duplicate certificate of shares for those certificates which are lost or destroyed:

  1. The listed entity shall submit information regarding loss of share certificates and issue of the duplicate certificates, to the stock exchange within two days of its getting information.
  1. Prior consent of the Board is required for issue of duplicate share certificates in lieu of those which have been lost or destroyed.
  1. Duplicate certificate for those certificates which are lost or destroyed can be issued on payment of such fees as the Board thinks fit and upon payment of an amount not exceeding rupees fifty per certificate and on such reasonable terms, such as furnishing supporting evidence and indemnity and the payment of out-of-pocket expenses incurred by the company in investigating the evidence produced.
  1. It shall be stated prominently on the face of duplicate certificates and be recorded in the Register maintained for the purpose, that it is “duplicate issued in lieu of share certificate No……” and the word “duplicate” shall be stamped or printed prominently on the face of the share certificate.
  1. In case of unlisted companies, the duplicate share certificates shall be issued within a period of three months and in case of listed companies such certificate shall be issued within forty five days, from the date of submission of complete documents with the company respectively.
  1. The particulars of every share certificate issued for subdivision shall be entered forthwith in a Register of Renewed and Duplicate Share Certificates maintained in Form No.SH.2 indicating against the name(s) of the person(s) to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross-references in the “Remarks” column.
  1. The register shall be kept at the registered office of the company or at such other place where the Register of Members is kept and it shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose.
  1. All entries made in the Register of Renewed and Duplicate Share Certificates shall be authenticated by the company secretary or such other person as may be authorised by the Board for the purposes of sealing and signing the share certificate.
  1. If a company with intent to defraud, issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447.

B. Procedure of issue of duplicate certificate of shares in lieu of those certificates which are defaced, mutilated or torn, or old, decrepit, worn out, or where the pages on the reverse for recording transfers have been duly utilized:

  1. Duplicate certificate of shares for those certificates which are defaced, mutilated or torn, or old, decrepit, worn out, or where the pages on the reverse for recording transfers have been duly utilized can only be issued upon surrender of original share certificates in lieu of which it is to be issued.

(Therefore request letter for subdivision of share certificates should be accompanied with original share certificates).

  1. The Company may charge such fee as the Board thinks fit, not exceeding fifty rupees per certificate issued in replacement of share certificate(s) that are defaced, mutilated, torn or old, decrepit or worn out.
  1. The listed entity shall issue certificates or receipts or advices, as applicable, of renewal, exchanges, issuance of duplicates thereof or issuance of new certificates or receipts or advices, as applicable, in cases of loss or old decrepit or worn out certificates within a period of thirty days from the date of such lodgment.
  2. Since statute does not specify that who is the competent authority within the company to issue duplicate share certificates issued in replacement of share certificate(s) that are defaced, mutilated, torn or old, decrepit or worn out, therefore it is advisable that such certificates should be issued in the manner as applicable in case of transfer and transmission of shares i.e. through Board Meeting or in case of listed company through duly authorized Share Transfer Committee, Compliance Officer, Registrar to an Issue or Share Transfer Agent.
  1. Where a duplicate share certificate is issued, it shall be stated on the face of it and be recorded in the Register maintained for the purpose, that it is “Issued in lieu of share certificate No….. replaced” and also that no fee shall be payable pursuant to scheme of arrangement sanctioned by the High Court or Central Government:
  1. The particulars of every share certificate issued for subdivision shall be entered forthwith in a Register of Renewed and Duplicate Share Certificates maintained in Form No.SH.2 indicating against the name(s) of the person(s) to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross-references in the “Remarks” column.
  1. The register shall be kept at the registered office of the company or at such other place where the Register of Members is kept and it shall be preserved permanently and shall be kept in the custody of the company secretary of the company or any other person authorized by the Board for the purpose.
  1. All entries made in the Register of Renewed and Duplicate Share Certificates shall be authenticated by the company secretary or such other person as may be authorised by the Board for the purposes of sealing and signing the share certificate.
  1. If a company with intent to defraud, issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447.

{Reference: Section 46 of Companies Act, 2013, Rule 6 of Companies (Share Capital & Debentures) Rules, 2014, Regulation 39 of SEBI (LODR) Regulations, 2015 and Rule 19(3) of Securities Contract (Regulations) Rules, 1957}