A share certificate is a registered ‘evidence of title’ to the shares, issued by the company under its common seal, duly stamped and signed by one or more directors and countersigned by the secretary of the company, as per Articles.
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A share certificate is not a ‘document of title,’ for, the rights under it are not transferable by a mere endorsement and/or delivery of the certificate. In order to moving the ownership of shares evidenced by a share certificate an ‘instrument of transfer* duly completed must be lodged with the company for approval by the Board of Directors.
A shareholder is entitled to have one share certificate in respect of shares registered in his name from the company free of charge, certifying that he is the holder of the specified number of shares in the company. In case shares are held by more than one person jointly with others, company shall issue only one share certificate to the holder first named in the Register of Members. The name of every holder of a share certificate shall appear in the Register of Members of the company.
Contents of the Certificate :
The share certificate must specify the name and the address of the registered office of the company. It must be issued under the Common Seal of the company and that must be affixed in the presence of two directors or their properly appointed attorneys and the secretary or some other person appointed by the Board for the purpose. All these persons must sign the share certificate. Besides this, the name(s) of the person(s) in whose favour the certificate is issued, the number and class of shares, distinctive number of shares, amount paid on each share, day and date of issue and certificate number are other usual details contained in a share certificate. Every share certificate must bear a 30 paise revenue stamp.