Procedure of Issue of Duplicate Share Certificate

The issue of share certificates is an important aspect of the corporate governance structure of any company. Share certificates serve as proof of ownership of shares in a company and are therefore crucial for shareholders to exercise their rights and receive dividends. However, in some cases, shareholders may lose or misplace their share certificates, which can create a problem for both the shareholder and the company. In such instances, the shareholder will need to obtain a duplicate share certificate to replace the lost or misplaced certificate. This process of issuing a duplicate share certificate is regulated by company law and involves a set of specific procedures that must be followed.

The issuance of duplicate share certificates is regulated by the Companies Act, which sets out the legal requirements that must be followed by companies when issuing duplicate certificates. These requirements are designed to ensure that the process is transparent and that the integrity of the share registry is maintained. In general, the process involves the shareholder providing evidence of the loss or misplacement of the original certificate and paying a fee to cover the costs of issuing the duplicate.

One of the first steps in the process of issuing a duplicate share certificate is for the shareholder to inform the company of the loss or misplacement of the original certificate. This is typically done by submitting a written request to the company, which should include details of the shareholder’s name, address, and contact information, as well as information about the shares that are covered by the lost or misplaced certificate. This information will be used by the company to verify the shareholder’s identity and to ensure that the correct shares are reissued.

Once the company has received the request for a duplicate share certificate, it will initiate an investigation to verify the shareholder’s claim. This may involve reviewing the company’s records and conducting interviews with the shareholder and other parties who may have information about the loss or misplacement of the certificate. The company may also require the shareholder to provide additional documentation, such as a police report, to support their claim.

Assuming that the company is satisfied that the shareholder has lost or misplaced their share certificate, the next step is to prepare the necessary documentation for the issue of a duplicate. This will typically involve the preparation of a duplicate share certificate, which will be signed by the company’s authorized signatories and sealed with the company seal. The duplicate certificate will bear the same information as the original certificate, including the name of the shareholder, the number and type of shares, and any restrictions or special provisions that may apply.

Before issuing the duplicate share certificate, the company will typically require the shareholder to sign a declaration or affidavit confirming that they have lost or misplaced the original certificate and that they will return it to the company if it is found. The shareholder may also be required to pay a fee to cover the costs of issuing the duplicate certificate, which will typically be set out in the company’s bylaws or regulations.

Once the duplicate share certificate has been prepared and the necessary documentation has been completed, the company will issue the certificate to the shareholder. This may be done in person, by post, or by electronic means, depending on the company’s policies and the preferences of the shareholder. The company will typically keep a record of the issue of the duplicate certificate, including details of the shareholder, the shares covered, and any fees paid.

The process of issuing a duplicate share certificate is an important aspect of the corporate governance structure of any company. It is designed to ensure that shareholders can exercise their rights and receive dividends, even if they have lost or misplaced their original certificates. The process is regulated by company law and involves a set of specific procedures that must be followed to ensure that the integrity of the share registry is maintained. By following these procedures, companies can help to build trust with their shareholders and demonstrate their commitment to transparent and accountable governance practices.

What is a Share Certificate?

A share certificate is a legal document that represents ownership of shares in a company. When someone purchases shares in a company, they receive a share certificate that serves as proof of their ownership. Share certificates typically include information such as the name of the shareholder, the number and type of shares owned, the date of issue, and any restrictions or special provisions that may apply to the shares. The certificate may also bear the company’s seal and the signatures of its authorized signatories. Share certificates are an important aspect of corporate governance, as they provide shareholders with a tangible and legal record of their investment in the company.

Why Does Someone Need a Duplicate Share Certificate?

A share certificate is a legal document that serves as proof of ownership of shares in a company. When someone purchases shares in a company, they receive a share certificate that contains important information such as the name of the shareholder, the number and type of shares owned, the date of issue, and any restrictions or special provisions that may apply to the shares. This document is a crucial aspect of corporate governance, as it provides shareholders with a tangible and legal record of their investment in the company. However, in some cases, shareholders may need to obtain a duplicate share certificate. In this blog, we will discuss some of the reasons why someone might need a duplicate share certificate and how they can obtain one.

Reasons for Needing a Duplicate Share Certificate

Loss or Misplacement

One of the most common reasons why someone might need a duplicate share certificate is if they have lost or misplaced their original certificate. This can happen for a variety of reasons, such as moving house or office, misplacing the document during a renovation, or losing the document while travelling. In any case, the shareholder will need to obtain a duplicate share certificate in order to continue to exercise their rights as a shareholder.

Theft

Another reason why someone might need a duplicate share certificate is if their original certificate has been stolen. Unfortunately, theft is a risk associated with any valuable document, and share certificates are no exception. If someone’s share certificate has been stolen, they will need to obtain a duplicate certificate in order to prevent the thief from fraudulently selling the shares.

Damage

In some cases, a share certificate may become damaged or defaced, making it difficult to read or invalidating the document altogether. If a shareholder’s certificate becomes damaged, they will need to obtain a duplicate share certificate in order to continue to exercise their rights as a shareholder.

Name Change

Sometimes, shareholders may change their name due to marriage, divorce, or other reasons. If a shareholder’s name has changed, they will need to obtain a duplicate share certificate in order to update the information on the certificate.

How to Obtain a Duplicate Share Certificate?

If a shareholder needs to obtain a duplicate share certificate for any of the reasons outlined above, they will need to follow a specific procedure in order to obtain one. This process is typically regulated by the Companies Act, which sets out the legal requirements that must be followed by companies when issuing duplicate certificates. The following is a general outline of the steps that a shareholder will need to take in order to obtain a duplicate share certificate:

Notify the Company

The first step in obtaining a duplicate share certificate is for the shareholder to notify the company that they have lost or misplaced their original certificate, or that it has been stolen or damaged. This is typically done by submitting a written request to the company, which should include details of the shareholder’s name, address, and contact information, as well as information about the shares that are covered by the lost or misplaced certificate.

Provide Evidence

Once the company has received the request for a duplicate share certificate, they will typically initiate an investigation to verify the shareholder’s claim. This may involve reviewing the company’s records and conducting interviews with the shareholder and other parties who may have information about the loss or misplacement of the certificate. The company may also require the shareholder to provide additional documentation, such as a police report or an affidavit, to support their claim.

Prepare the Documentation

Assuming that the company is satisfied that the shareholder has lost or misplaced their share certificate, the next step is to prepare the necessary documentation for the issue of a duplicate. This will typically involve the preparation of a duplicate share certificate, which will be signed by the company’s authorized signatories and sealed with the company seal. The duplicate certificate will bear the same information as the orgin certificate. 

 Documents Required for Issue of Duplicate Share Certificate?

Obtaining a duplicate share certificate is a process that shareholders may need to go through if they have lost or misplaced their original share certificate, or if it has been stolen or damaged. This process typically involves following a specific procedure set out by the Companies Act, which outlines the legal requirements that must be met in order for a company to issue a duplicate share certificate. In this blog, we will discuss the documents that shareholders will need to provide in order to obtain a duplicate share certificate.

• Written Request

The first document that a shareholder will need to provide when requesting a duplicate share certificate is a written request to the company. This request should include the shareholder’s name, address, and contact information, as well as information about the shares that are covered by the lost or misplaced certificate. The request should also include a statement indicating that the shareholder has lost or misplaced their original certificate, or that it has been stolen or damaged.

• Indemnity Bond

The Companies Act requires that shareholders provide an indemnity bond when requesting a duplicate share certificate. An indemnity bond is a legal document that provides a guarantee against any loss or damage that may be incurred by the company as a result of issuing a duplicate share certificate. The bond typically requires the shareholder to indemnify the company against any losses that may arise as a result of fraud, forgery, or any other fraudulent activity related to the lost or misplaced certificate. The amount of the bond may vary depending on the value of the shares and the specific requirements of the company.

• Affidavit

In addition to the indemnity bond, shareholders may be required to provide an affidavit to support their claim for a duplicate share certificate. An affidavit is a written statement made under oath, and it typically includes details about the circumstances surrounding the loss or misplacement of the original share certificate. The affidavit may also include information about any attempts that the shareholder has made to locate the certificate, as well as any steps that they have taken to prevent its fraudulent use.

• Police Report

If the share certificate has been stolen, shareholders may be required to provide a police report to support their claim for a duplicate share certificate. The police report should include details about the theft, including the date and time that it occurred, as well as any other relevant information about the circumstances of the theft. The police report will help to support the shareholder’s claim that the original certificate has been stolen and is no longer in their possession.

• Identity Proof

Shareholders will also be required to provide proof of their identity when requesting a duplicate share certificate. This may include a copy of their passport or driver’s license, as well as any other documentation that can be used to verify their identity. The company may require that the identity proof be notarized or certified by a legal authority in order to ensure that it is valid.

• Shareholder Agreement

In some cases, shareholders may be required to provide a shareholder agreement when requesting a duplicate share certificate. If the shareholder agreement includes specific provisions related to the issuance of duplicate share certificates, shareholders will need to provide a copy of the agreement when making their request.

 Procedure followed for issue of Duplicate Share Certificate

In case a shareholder has lost or misplaced their original share certificate or it has been stolen or damaged, the shareholder can request a duplicate share certificate from the company. The Companies Act, 2013 and the rules framed thereunder provide for the procedure for issuing duplicate share certificates. This blog will discuss the step-by-step process for issuing a duplicate share certificate.

The first step in obtaining a duplicate share certificate (recovery of shares) is to notify the company that the original share certificate has been lost or misplaced, or it has been stolen or damaged. The shareholder should inform the company in writing of the loss, misplacement, theft or damage of the original share certificate. The letter should contain the following information:

• The name of the shareholder
• The registered address of the shareholder
• The number of shares held by the shareholder
• The distinctive number(s) of the lost, misplaced, stolen or damaged share certificate(s)
• The date of the share certificate(s)
• The reason for the loss, misplacement, theft or damage of the share certificate(s)
• Submission of Documents

After notifying the company of the loss, misplacement, theft or damage of the share certificate, the shareholder should submit the following documents to the company:

1. Indemnity Bond

An indemnity bond is a legal document that provides a guarantee against any loss or damage that may be incurred by the company as a result of issuing a duplicate share certificate. The bond typically requires the shareholder to indemnify the company against any losses that may arise as a result of fraud, forgery, or any other fraudulent activity related to the lost or misplaced certificate. The amount of the bond may vary depending on the value of the shares and the specific requirements of the company

2. Affidavit

In addition to the indemnity bond, shareholders may be required to provide an affidavit to support their claim for a duplicate share certificate. An affidavit is a written statement made under oath, and it typically includes details about the circumstances surrounding the loss or misplacement of the original share certificate. The affidavit may also include information about any attempts that the shareholder has made to locate the certificate, as well as any steps that they have taken to prevent its fraudulent use.

3. Identity Proof

Shareholders will also be required to provide proof of their identity when requesting a duplicate share certificate. This may include a copy of their passport or driver’s license, as well as any other documentation that can be used to verify their identity. The company may require that the identity proof be notarized or certified by a legal authority in order to ensure that it is valid.

4. Shareholder Agreement

In some cases, shareholders may be required to provide a shareholder agreement when requesting a duplicate share certificate. A shareholder agreement is a legal document that outlines the rights and responsibilities of shareholders, and it may include information about the process for issuing duplicate share certificates. If the shareholder agreement includes specific provisions related to the issuance of duplicate share certificates, shareholders will need to provide a copy of the agreement when making their request.

5. Police Report

If the share certificate has been stolen, shareholders may be required to provide a police report to support their claim for a duplicate share certificate. The police report should include details about the theft, including the date and time that it occurred, as well as any other relevant information about the circumstances of the theft. The police report will help to support the shareholder’s claim that the original certificate has been stolen and is no longer in their possession.

6. Payment of Fees

After the submission of the required documents, the shareholder will need to pay the fees for issuing a duplicate share certificate. The fees may vary depending on the company and the value of the shares.

Once the company receives the written notification and all the required documents and fees from the shareholder, the board of directors of the company will review the request for a duplicate share certificate. The board of directors will consider the circumstances surrounding the loss, misplacement, theft or damage of the original share certificate and will ensure that the request is genuine and valid.

If the board of directors is satisfied with the documents and information provided by the shareholder, they will pass a resolution approving the issuance of a duplicate share certificate. The resolution will contain details about the number of shares to be issued, the distinctive numbers of the shares, and any other relevant information about the issuance of the shares. The resolution will also include the name of the person authorized to sign the duplicate share certificate on behalf of the company.

Issuance of Duplicate Share Certificate

After the resolution is passed, the company will issue a duplicate share certificate to the shareholder. The duplicate share certificate will contain the same details as the original share certificate, including the number of shares held by the shareholder and the distinctive numbers of the shares. The duplicate share certificate will also include a statement that it is a duplicate and that it has been issued in place of the original share certificate.

The shareholder will need to sign the duplicate share certificate and return it to the company. The company will then cancel the original share certificate and mark it as “cancelled” in its records.

Shareholder Records

After the duplicate share certificate is issued and signed by the shareholder, the company will update its shareholder records to reflect the issuance of the new share certificate. The company will also update its register of members to reflect the cancellation of the original share certificate.

Missing share certificate- The company will then notify the shareholder of the issuance of the duplicate share certificate and the cancellation of the original share certificate. The shareholder should keep the duplicate share certificate in a safe place to prevent its loss or misplacement.

Lost Share Certificate Recovery

Recover lost share certificate– If you have lost your share certificate, there are a few steps you can take to try to recover it. Here are some tips on how to recover a lost share certificate:

Contact the Registrar of Companies: The Registrar of Companies is responsible for maintaining records of companies and their shareholders. You can contact the Registrar of Companies and request a copy of your share certificate. You will need to provide your personal details and the details of the company in which you hold shares.

Contact the Company: You can contact the company and request a duplicate share certificate. The company will require you to provide proof of identity and ownership of the shares. You may also need to sign an indemnity bond, which is a legal document that indemnifies the company against any losses or liabilities arising from the issuance of the duplicate share certificate.

File a Police Report: If your share certificate was stolen, you should file a police report. The police report will provide evidence that the share certificate was stolen, which will help you to recover it. You should also inform the company of the theft and provide them with a copy of the police report.

Obtain a Court Order: If the company refuses to issue a duplicate share certificate or if you believe that the share certificate has been illegally transferred to another person, you can obtain a court order to recover the share certificate. You will need to provide evidence that you are the rightful owner of the shares.

Keep a Record of your Shares: It is important to keep a record of your shares, including the share certificate number and the number of shares held. This will help you to recover your shares in case the share certificate is lost or stolen.

In conclusion, recovering a lost share certificate (loss of share certificate)  can be a challenging process, but it is possible. You should take immediate action to recover your share certificate and keep a record of your shares to avoid any future problems.

Conclusion

Obtaining a duplicate share certificate can be a complex process that involves providing a variety of different documents and following a specific procedure set out by the Companies Act. By providing the necessary documents and following the required procedure, shareholders can ensure that they obtain a valid duplicate share certificate that allows them to continue to exercise their rights as shareholders in the company. It is important for shareholders to keep their original share certificates in a safe place to avoid the need for a duplicate certificate in the first place.

The procedure for issuing a duplicate share certificate involves several steps and requires the submission of several documents, including an indemnity bond, an affidavit, proof of identity, and a shareholder agreement. The process ensures that the request for a duplicate share certificate is genuine and valid and that the original share certificate has been lost, misplaced, stolen or damaged. The board of directors of the company must approve the issuance of the duplicate share certificate, and the company must update its records to reflect the issuance of the new share certificate and the cancellation of the original share certificate. Overall, the process ensures the integrity and accuracy of the company’s records and protects the interests of shareholders.