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46 Certificate of shares.

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CHAPTER IV

Section 46 of Companies Act 2013

1.     A certificate,  “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.

2.     A duplicate certificate of shares may be issued, if such certificate —

a.     is proved to have been lost or destroyed; or

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.

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.

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.

1. substituted with effect from 25th May, 2015.

Short Notes:

  • This section shall come into force from April 1, 2014.
  • It seeks to provide that a certificate issued by a company shall be prima facie evidence of the title of the person to such shares.
  • It provides the manner for issuance of duplicate share certificate and the particulars to be entered in the register of members.
  • If a company issues duplicate shares with an intention to defraud public, penal provisions for fraud would be attracted for such violations.

 

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