Procedure for Get Duplicate Copy of Share Certificate

When companies issue a share certificate when purchasing shares, they might get lost and misplaced by shareholders. This may happen due to various unforeseen circumstances. Losing the original copy may often lead to significant financial losses for the company and its shareholders. However, the central government provides remedies to avoid unwanted losses to society and shareholders. There is a provision devised by the 2013 Companies Act for issuing duplicate share certificates. This will help to overcome misappropriation and loss of the original shareholder’s share certificate. 

Read on to learn about the procedure for issue of duplicate share certificate. 

What is a share certificate?

A share certificate is official documentation of an individual’s ownership of company shares, providing tangible proof of ownership. It includes essential details such as the issuing firm’s name, Corporate Identification Number, registered address, folio number, quantity of shares, invested amount, and the shareholder’s complete name. 

Both the Companies Act and Rule 6 of the Companies of 2014 permit the issuance of duplicate share certificates to safeguard the company and its shareholders from potential losses. It’s important to understand that the company will issue a duplicate certificate under specific circumstances. These circumstances include-

• When the share certificate gets misplaced and lost
• The certificate was returned to the company because it was torn and defaced

Mandatory requirement

• Exhorting the stockholder for mutilating, defiling and ravaging a company.
• Hand over the fractional coupons and ration sheets of the required value to the company.

Responsibility of shareholder

Shareholders are advised to proceed in case of a lost and misplaced share certificate.

• Promptly notify the Company about the lost or misplaced share certificate.
• This notification can be conveyed through a letter sent to the Company’s address or via email.
• Provide pertinent details regarding the lost or misplaced share certificate, including name, address, folio number, and share certificate number.

Reasons for needing a duplicate share certificate

Loss or misplacement

You may want a duplicate share certificate when you lose and misplace the original copy. This kind of situation may arise due to many reasons. It includes the relocation of business and home, misplacing the document during home renovation and travelling. No matter what the scenario, shareholders should obtain a duplicate share certificate to continue practising their shareholder rights.

Theft

You may want to apply for a duplicate share certificate when the original copy gets stolen. There is always a possibility of getting any valuable document stolen, including a share certificate. In such an event the shareholder must immediately issue a duplicate certificate to prevent the thief from accessing the shares illegally. 

Damage

Occasionally, a share certificate may get destroyed or tampered with. This renders it unreadable and nullifies the document. Shareholders must get a duplicate share certificate if their original certificate is destroyed to continue using their shareholder rights.

Name change

A shareholder’s name may be changed for many reasons. It includes getting married and divorced. The shareholder must obtain a duplicate share certificate to update any changed information, such as their name.

Steps to be taken by the company

The company should adhere to the following protocol after the loss or misplacement of a share certificate.

• Upon receiving notification regarding lost or misplaced share certificates, the company should initiate a freeze on transfers for a minimum of 30 days to mitigate the risk of fraudulent or unauthorized transfers.
• Following the completion of the company registration process, the entity should assist the shareholder in obtaining a duplicate share certificate upon verification of the shareholder’s identity.

Documents required for issuing the duplicate share certificate

• An indemnity bond contract is executed on a non-judicial stamp paper.
• The affidavit was drafted on a non-judicial stamp paper and notarized by a notary public/special executive magistrate.
• Police First Information Report lodged, containing the following details about the lost share certificate:

• Name as stated on the share certificate.
• Share certificate number.
• Folio number referenced on the share certificate.
• Distinctive share numbers.

• Publication of a notice in a newspaper regarding the loss or misplacement of the share certificate.
• Verify the shareholder’s identity and residential address.

Duplicate share certificate issue process

The issue of duplicate share certificate process is outlined as follows:

• The shareholder must apply for the issuance of a duplicate share certificate along with the necessary documents to the company. The documents provided to the company must bear the signature of the shareholder whose share certificate is lost or misplaced.
• Upon receipt of the application, the company will initiate the process for issuing a duplicate share certificate.
• The company’s board must approve issuing the duplicate share certificate of directors.
• In granting consent for the issuance of a duplicate share certificate, the Board must consider the following aspects:
  • The Board is authorized to levy fees for issuing a duplicate share certificate, provided that the fees do not exceed Rs.50 per share certificate.
  • Additionally, the Board should consider any out-of-pocket expenses incurred during the investigation of the evidence submitted by the shareholder while issuing the duplicate share certificate.

• Following the Board’s approval for issuing a duplicate share certificate, the company will meticulously review all the documents and subsequently issue the share certificate to the shareholder.
• A listed company must issue of duplicate share certificate within 45 days of submitting documents to the company.
• Conversely, an unlisted company must issue of duplicate share certificate within three months of submitting documents to the company.
• Upon issuance of the duplicate share certificate by the company, entries must be recorded in the ‘Register of Renewed and Duplicate Share Certificate’ maintained in Form SH-2.
• The duplicate share certificate must include the declaration: ‘Duplicate issued instead of Share Certificate No…’, with the term ‘Duplicate’ visibly stamped or printed in block letters on the share certificate.
• The ‘Register of Renewed and Duplicate Share Certificate’ must be stored at the company’s registered office or at the location where the Register of Members is maintained, or it can be preserved by the company secretary or another authorized individual as sanctioned by the Board of Members for this purpose.

Conclusion

Securing a duplicate share certificate can prove intricate, involving the submission of various documents and adherence to a precise procedure delineated by the Companies Act. By furnishing requisite documents and complying with prescribed protocols, shareholders can secure a valid duplicate share certificate to retain their shareholder rights within the company. Shareholders must safeguard their original share certificates to prevent the need for duplicates initially.

Issuing a duplicate share certificate encompasses multiple stages and necessitates the submission of diverse documents, including an indemnity bond, affidavit, proof of identity, and shareholder agreement. This procedure for issue of duplicate share certificate ensures the legitimacy of the duplicate share certificate request, affirming the original share certificate’s loss, misplacement, theft, or damage. 

Approval by the company’s board of directors is mandatory for duplicate share certificate issuance, and the company must duly update its records to reflect the issuance of the new certificate and the annulment of the original one. Overall, this process safeguards the integrity and precision of the company’s records while preserving shareholders’ interests.

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