Thursday, 22 May 2014

SHARE CERTIFICATES AND RELATED BOOKS



We have discussed Section 46 of the Companies Act, 2013 which deals with Share Certificates earlier here.
Rule 7 of the Companies (Share Capital and Debentures) Rules 2014 makes detailed provision for this purpose.
All blank forms to be used for issue of share certificates shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank form shall be consecutively machine-numbered. The
forms and the blocks, engravings, facsimiles and hues relating to the printing of Share Certificate forms shall be kept in the custody of the secretary or such other person as the Board may authorise for the purpose. The company secretary or other person aforesaid shall be responsible for rendering an account of these forms to the Board.
The following persons shall be responsible for the maintenance, preservation and safe custody of all books and documents relating to the issue of share certificates, including the blank forms of share certificates:—
(a) the committee of the Board, if so authorized by the Board or where the company has a company secretary, the company secretary; or
(b) where the company has no company secretary, a Director specifically authorised by the Board for such purpose.
All books shall be preserved in good order not less than thirty years and in case of disputed cases, shall be preserved permanently.
All certificates surrendered to a company shall immediately be defaced by stamping or printing the word “cancelled” in bold letters and may be destroyed after the expiry of three years from the date on which they are surrendered, under the authority of a resolution of the Board and in the presence of a person duly appointed by the Board in this behalf. This sub-rule shall apply to cancellation of the certificates of securities, under sub-section (2) of section 6 of the Depositories Act, 1996 (22 of 1996), when such certificates are cancelled in accordance with sub-regulation (5) of regulation 54 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, made under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 25 of the Depositories Act, 1996 (22 of 1996).

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