If you purchased physical shares, you must know how important a share certificate is. But if it gets lost, you would be left with no proof of ownership. Thus, issuing a duplicate copy of the share certificate is important. However, before we learn how to get the duplicate copy, let’s understand what a share certificate is.
What is a Share Certificate?
A share certificate certifies a shareholder’s or beholder’s ownership of company shares. It is prima facie evidence of the owner because it contains the name of the issuing firm, Corporate Identification Number (CIN), company’s registered address, members folio number, number of shares, amount of money spent, and the shareholder’s full name.
The Companies Act of 2013 and Rule 6(2)(a) to (c) of the Companies (Share Capital and Debentures Rules) of 2014 both allow for the issuance of duplicate share certificates to prevent any unnecessary loss to the firm and its shareholders. However, you must note that the company will issue a duplicate certificate in the following cases.
a. Is proved to be lost or misplaced
b. Has been returned to the company after it is defaced or torn
What you must do after losing your share certificate?
You need to report to the police and the respective company immediately, mentioning the folio number and details of the share certificate(s) to the company for their reference. After the company has received the information of the loss or misplacement, they freeze the share transfer for at least 30 days to avoid illegal or fraudulent transfers. Once the shareholder’s identity is established, the company can proceed with issuing a duplicate certificate.
Documents required for the issuance of a duplicate share certificate
- An indemnity bond agreement on judicial stamp paper of ₹ 500
- An affidavit made on stamp paper of Rs. 100
- Affidavit cum indemnity bond should be as per the Company’s format
- FIR registered with the police on the missing share certificate mentioning the name on the certificate, folio number, and a distinctive number of shares
- An advertisement needs to be published in the newspaper highlighting the lost/misplaced share certificate
What steps should be followed for the issue of a duplicate share certificate?
Steps to be taken by shareholders
- Prepare indemnity bond and affidavit on a non-judicial stamp paper of the requisite value, duly attested by a Notary Public/Special Executive Magistrate, respectively.
- Get the surety bond with the full name, address, and signature of the surety, along with their proof of identity.
- Lodge a police complaint and submit a copy of the FIR mentioning folio number, share certificate(s), unit name, distinctive number(s), and the number of lost shares in original or attested by Notary/Gazette Officer.
- Newspaper publication of the advertisement containing the details of the lost share certificates
- Once all the documents are ready, submit them to the company.
Steps to be taken by the company
- After receiving the missing complaint, the company will freeze the share transfer for at least 30 days to ensure no illegal transfer proceedings.
- Simultaneously, the company will verify all the documents submitted.
- Get approval from the company’s Board of Directors.
- A duplicate share certificate with the word ‘Duplicate’ stamped on it will be issued.
Note: Generally, duplicate share certificates are issued within 6 weeks from the date of receipt of all the valid documents by the company.
Conclusion
A share certificate is a document certifying a company’s ownership of shares. However, it is difficult to maintain physical share certificates in this digital era. If you lose a share certificate(s), you can apply for a duplicate certificate by submitting the relevant documents to the company. The best solution to get away from the hassle of managing physical certificates is to apply for dematerialization
of physical certificates as soon as possible as it guarantees the highest level of safety and security.
