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Question: Write short notes on Share Warrant.Find the question and answer of Company Law only on Legal Bites. [Write short notes on Share Warrant.]AnswerA Share Warrant is a document which is issued by a company under its common seal against fully paid-up shares. This is a negotiable instrument which entitles the bearer to hold shares which are specified therein. The registration of share warrant is not necessary and its ownership can be transferred by mere delivery. Dividend will be paid...
Question: Write short notes on Share Warrant.
Find the question and answer of Company Law only on Legal Bites. [Write short notes on Share Warrant.]
Answer
A Share Warrant is a document which is issued by a company under its common seal against fully paid-up shares. This is a negotiable instrument which entitles the bearer to hold shares which are specified therein. The registration of share warrant is not necessary and its ownership can be transferred by mere delivery. Dividend will be paid on shares to the shareholders through a coupon which is attached to each share warrant. This coupon bears a date on which dividend will be paid by the company to the shareholders.
The (Indian) Companies Act, 2013 does not "directly" prescribe any law related to Share Warrant.
Conditions for the issue of Share Warrants
• The shares must be fully paid up.
• The issue of share warrant must be authorised by the article of association.
• The private limited company cannot issue share warrant.
• The public limited company can issue share warrant.
• The share warrant is issued under the common seal of a company.
• The share warrant for public limited company is issued with the prior approval of the central government.
Contents of Share Warrants
Share warrant consists of three parts (Counterfoil, Share warrant and Dividend coupon). Contents of the ShareWarrants are as follows:
• The name of the holder of shares.
• The address of shareholder.
• The number of shares held by him.
• The name of the registered office of the company
• The address of the registered office of the company.
• The distinctive number of the share certificate.
• The class of shares.
• The day and date of issue of share certificate.
• The impression of the common seal of the company.
• Signature of two directors and secretary of the company.
Procedure involved in the issue of share warrant
1) Submit an application to the company by the share holder for converting share in to share warrant.
2) The share holder should bear the stamp duty and other fee.
3) The company secretary will issue lodgement ticket (acknowledgement for the receipt of document) to the shareholders.
4) Legal formalities related to the share warrant.
5) Share warrant shall have three parts viz., counter foil, share warrant and dividend coupons 6. The forms are serially numbered.
6) Pass a resolution in the board meeting.
7) Share warrants are signed and sealed and informed the applicant.
8) Share holders can get the share warrant from th office of the company.
Mayank Shekhar
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