This section is for outlining the rules and procedures for issuing and managing share certificates in a company.
What the section says
In plain terms
(1)A certificate, 1[issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary], specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares.
A certificate issued under the company's common seal, or signed by two directors or a director and the Company Secretary, serves as initial proof of a person's ownership of shares.
(2)A duplicate certificate of shares may be issued, if such certificate —
A duplicate share certificate can be issued if the original is lost, destroyed, defaced, mutilated, or torn and surrendered to the company.
(2)(a)is proved to have been lost or destroyed; or
(2)(b)has been defaced, mutilated or torn and is surrendered to the company.
(3)Notwithstanding anything contained in the articles of a company, the manner of issue of a certificate of shares or the duplicate thereof, the form of such certificate, the particulars to be entered in the register of members and other matters shall be such as may be prescribed.
The issue and form of share certificates, including duplicates, and the details to be recorded in the register of members, will follow prescribed procedures.
(4)Where a share is held in depository form, the record of the depository is the prima facie evidence of the interest of the beneficial owner.
For shares held in depository form, the depository's records are the primary evidence of the beneficial owner's interest.
(5)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.
If a company issues a duplicate share certificate with intent to deceive, it can be fined at least 5 times the face value of the shares, up to 10 times the face value or 10 crores, whichever is higher.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.