Stamping of debenture certificate under the stamp act

Right Issue

Right issues of shares by listed and unlisted companies are explained later in the book. Both private limited company and public companies have issue these rights.

Issue of securities at a premium

Where shares or convertible debentures are issued at a price higher than the nominal or par value of shares, the excess over the nominal value is called the premium. As and when such amount is received from applicants, and subsequently as per the terms of issue, that amount is credited to an account called securities premium account of their registration amounts. The amount in the said account shall be applied by the company for the following purposes:

  • By capitalizing the amount for issue of fully paid bonus shares to the members.
  • For writing off prior rates of the company.
  • For registering off the costs in the points of securities or commission paid or discount allowed in any issue of securities containing debentures.
  • For providing the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.
  • For providing money for purchase of its shares by a company under section 77A.

Stamping of debenture certificate under the stamp act

Duplicate Certificates

When shareholders misplace their certificates which are not traceable and are deemed lost and request the company to issue duplicates thereof, in such an eventuality the company may take the following steps:

  • The shareholder will be asked to issue a public notice in the district of location of company registration office to the effect that he has lost the share certificate and has applied to the company to provide a duplicate in place of the one he has lost.
  • The said notice will invite objections if any certificates of duplicate shares with the period indicated in the public notice, say within 30 days.
  • The shareholders will be asked to execute an indemnity bond in favor of the company duly countersigned by a schedule bank or a member of stock exchange.
  • The shareholder will also be asked to enhance a legal document sworn in the presence of a magistrate or other competent authority.

Great care to be taken for providing duplicate certificates:

Section 84(2) provides that a duplicate certificate may be issued if the original certificate is proved. The Hon’ble court trying a case observed that once a duplicate certificate is issued. The original registration certificates is issued under the registrar. So as a measure of adequate precaution, public notice and information to stock exchange in the case of listed shares are given and no company can afford to take precautions lightly.

Record of certificates issued

Every company shall record the particulars of share certificates issued at the time of allotments. In a depository system there will be no certificates.

All the provided certificates in the circumstances specified above:

  • Number and date of old certificates surrendered or lost.
  • Number and date of new certificates issued.
  • The normal sanction of the government or within the time extended.
  • Power of company to alter its capital Entries of issue of certificates.

The issue shares means an issue of shares at less than the nominal value. Such a step is taken when a private limited company or public limited company is in great difficulties. This requires the prior approval of the central government as per the amendment made by the second amendment act 2002.

The term “capital” referred to here means the authorized capital of the company stated in the memorandum. The authorized capital may be increased or the share capital may be varied if the articles of the company authorize the alteration. Increasing the authorized capital by such amount as is deemed necessary.


Consolidation and division of the share capital into shares of larger amount as for instance 1,00,000 shares of Rs.10 each may be consolidated into 10,000 shares of Rs.100 each stamping.

Sub-division of the shares into shares of smaller amount than is fixed by the memorandum in such a way that the proportion of paid-up amount and amount, if any unpaid in the sub-divided share shall be in the same proportion before. For instance, if shares of Rs.10 each in which Rs.5 in paid-up are proposed to be sub-divided into shares of Rs.1 each, the paid-up amount in each sub-divided share will become Rs.0.5 and the unpaid amount will be Rs.0.5 in every share. A listed company shall be governed by the conditions prescribed by SEBI for sub-division.

It is also possible for a company by passing an ordinary resolution to cancel shares which were issued but have not been subscribed. Such cancellation would not amount to reduction of capital. The registration office may placed in Coimbatore and their surrounding places like Salem, Madurai and Chennai.

Governments Clarification

A company passed a resolution under clause (e) of section 94(1) to cancel issued shares not taken up and at the same created unclassified shares for the same amount as per clause (a) and no increase in authorized capital was involved.

Notice to registrar under section 95

Where a company has, pursuant to the resolution passed in the general meeting under section 94(1), taken any such action, it shall within 30 days after doing so file the notice in form 5 with the ROC, where a company has redeemed any preference shares, form 5 will also be filed with the registrar.

Reduction of capital

A company limited by shares and a company limited by guarantee and having share capital, if authorized by its articles, may reduce its share capital. This requires the approval of company in general meeting by special resolution and confirmation by the National Company Law Tribunal which has been entrusted with the power under sections 100 to 104. Normally, the company registration process may be held in the Coimbatore ROC.



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