companies law (1)-group9

7/31/2019 Companies Law (1)-Group9

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Companies Law

Presented by Deepshikha

Meeta

Nikita

Shivani


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What is Company ?

The company form of business organisation is one inwhich the funds of a large number of investors are

managed by few persons for the purpose of earningprofits which are shared by all the investors.


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Characteristics of a Company Registration: A company is to be compulsorily registeredunder the Companies Act.

Distinct person Separate legal entity: A company is adistinct person possessing its own identity. It is a separatelegal entity , independent from its members, thoughcontrolled by the B.O.D.


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Salomon v Salomon & Co Ltd[1897] AC 22, it has been heldthat in common law, a company is a separate legal entity andthus a juristic "person" in the eyes of the law. As with all simple

things, the case is complex and has many layers. AaronSalomon was a Jewish leather merchant in Victorian England.He set up a company with the required seven shareholders(his wife and kids). He lent the company money (as a securedcreditor) and then borrowed more money and got into financial

trouble. The question of law was who should be paid first,unsecured creditors (like employees and utility bills) or himselfas a secured creditor.

The UK Court of Appeal was anti-semetic and felt Salomonwas a fraud and his company was a "sham". But the House ofLords court stated that the company was properly set up, therewas no fraud and thus Mr. Salomon was a distinct entity fromhis company, his directorship, his shareholding and his rightsas a secured creditor.


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Perpetual succession : A company incorporated neverdies. It has a perpetual succession. Its member may

come and go but the company can go on for ever andremain the same entity

Artificial Person but not a citizen : the company is anartificial person. It functions through its B.O.D. However, itis not a citizen as it cannot enjoy the rights under theconstitution of India.


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In State Trading Corporation of India v C.T.O (1963) SCJ(705), it was held that neither the provisions of theConstitution nor the Citizenship Act apply to it. It shouldbe noted that though a company does not possess

fundamental rights, yet it is person in the eyes of law. Itcan enter into contracts with its Directors, its members,and outsiders.

Justice Hidayatullah once remarked that if all themembers are citizens of India, the company does notbecome a citizen of India.


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Transferable Shares: In a public company, the sharesare freely transferable. The right to transfer shares is astatutory right and it cannot be taken away by a provisionin the articles.

Limited Liability : A company may be company limitedby shares or a company limited by guarantee. In

company limited by shares, the liability of members islimited to the unpaid value of the shares.

For example, if the face value of a share in a company isRs. 10 and a member has already paid Rs. 7 per share,

he can be called upon to pay not more than Rs. 3 pershare during the lifetime of the company.

In a company limited by guarantee the liability ofmembers is limited to such amount as the member may

undertake to contribute to the assets of the company in


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Separate Property : As a company is a legal persondistinct from its members, it is capable of owning,

enjoying and disposing of property in its own name.In Hyderabad (Sind) Electric Supply Co. vs. Union of

India (A.I.R. 1959 Punj. 199), it was held that the propertyof the company is not the property of shareholders. It is

the property of the company.

Capacity to sue and be sued: A company can sue andbe sued in its corporate name.


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REGISTRATION AND CERTIFICATE OF

INCORPORATION

A company obtains separate legal existence only after it isregistered under the Companies Act and is issued a Certificateof incorporation by the registrar of companies of the statewhere registered office of the company is situated.

Certificate of incorporation is a document which certifies thatthe company has been registered with the registrar ofcompanies under the companies Act on a particular date.

Certificate of incorporation is issued by the registrar ofcompanies when the procedure for registration of a companyunder the Act is complied with. As and from that date, thecompany obtains a legal status and is an independent

corporate personality. The certificate of incorporation is adocumentary proof to establish the registration of thecompany.


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NAME OF THE COMPANY AND PROCEDURE FOR

REGISTRATION OR INCORPORATION OF A COMPANY

1. Application for availability of name under which the companyproposes to be incorporated is to be made to the registrarcompanies in the prescribed form in the state where the registeredoffice of the company is to be situated.

2. After the name is made available, memorandum and Articles ofassociation of the company is to be filed with registrar of

companies with necessary stamp duty and filing fees.3. It is advisable to file with the Registrar along with the

Memorandum and Articles of association of the situation of theregistered office of the company and the particular of firstdirectors of the company.

4. A declaration by an Advocate of the supreme court or of a high

court or attorney or a pleader entitled to appear before a high courtor a secretary or a chartered accountant practicing in India who isengaged in the formation of a company, or by a person named inthe Articles as director, manager or secretary of the company, thatall the requirements of the Act have been complied with in respectof registration, shall be filed with the registrar[sec 33].


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Conti

5. If a company intends to participate in an industryincluded in the schedule of industries Act 1951, a

license to that effect must be obtained.

In case of a public company, the following further

required are to be complied with:

i. A list of person who have consented to act as

directors.

ii. A written consent of the directors to act in thatcapacity.

iii. An undertaking by the directors to take up and pay

for their qualification shares.


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EFFECTS OFREGISTRATIONS From the date of incorporation mentioned in the

certificate of incorporation:

1. Each of subscribers to the Memorandum and otherpersons as may from time to time be members of thecompany, shall be a body corporate by name containedin the Memorandum.

2. Shall be capable forthwith all the exercising offunctions of an incorporated company.

3. Shall have perpetual succession And a common seal

4. With such liability on the part of the members tocontribute to the assets of the company is the event of itbeing wound up as is mentioned in the Memorandumand Articles of company.


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Conti

5. As from the date mentioned in the certificate ofincorporation it becomes altogether distinct from its

members and obtains an independent corporate and

legal status.

6. Acquires perpetual succession.

7. Property belongs to the company and not to

individual shareholders.

8. A private company can commence businessimmediately on incorporation. A public company

has to obtain a certificate of commencement of

business before commencing business.


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ADVANTAGES OF INCORPORATION

1. Corporate Existence: The company on corporation obtainsindependent corporate existence. Ti is vested with anindependent legal personality distinct from the memberswho compose it. It become a body corporate of immediatelyfunctioning as an incorporated individual.

2. Liability: The liability of the members is limited to theextend of nominal amount of shares subscribed in thecompanys share capital. In case of the company limited byguarantee. The liability of the members is limited to theextent of the amount guaranteed by each members.

3. Transferable Shares: Shares in a company can be transferred

easily without the consent of the other members.4. Perpetual Successions: As the company has separate legal

existence independent of its members, it is not affected bydeath or insolvency of a member. It has a perpetualexistence.


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CONTI..

5. Members and the Company: company being a separate legalentity it can sue its members in the ordinary way, can giveloans to members, enter into contracts with members, etc.

6. Management: management of the company can be vested inprofessionals and the members of the company can appointcapable persons to manage the affairs of the company to thegeneral interests of the shareholders. Employees of thecompany can also become its shareholders.

7. Separate Property: Though capital and assets are contributedby its members, it is the company which is the owner of thecapital and assets and it can enjoy and dispose off property

in its own name.8. Capacity to sue and be sued: A company being a body

corporate, can sue and be sued in its own name.


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FILLING OF APPLICATION, DOCUMENTS, INSPECTION, ETC

through Electronic Form[Secs. 610B, 610C, 610D AND 610E]

Companies Act, 2006 with effect from16.09.2006 required application, balance sheet,

prospectus, return, declaration, Memorandum of

association, Articles of Association, particulars

of charges or any other particulars or

documents, to be filed, delivered, maintained

and inspected through the electronic form and

authenticated.


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CompaniesLimited ByGuarantee

StatutoryCompanie

s

RegisteredCompanis

RoyalCharted Or

ChartedCompanies

PublicCompanies

PrivateCompanies

UnlimitedCompanies

CompaniesLimited By

Share

Types ofCompanies


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Royal Charted Or Charted

Companies

These Companies are incorporated special Royal

Charter issued by the King or Queen. Their Power and action are governed by the

charted for example East India Company, Bank of

England, etc.

Such Companies are treated as foreign Companies

in India.


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Statutory Companies

These Companies are formed under the Special Statutory Act

of the Parliament or State Legislature.

For example Reserve Bank of India, State Bank of India,

Industrial Finance Corporation of India, Life InsuranceCorporation of India.

These companies are mostly public undertakings and are

formed with the main object of public utilies and not for

profits.

Any change in the working of these companies is regulated

by Parliament or Legislative amendments only.


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Registered Companies

Companies registered under the Companies Act, 1956 or under any

previous Companies Act.

All companies now regulated by the provision of the Companies

Act, 1956.These companies have Memorandum of Association and

Articles of Association for their external and internal regulation.

Companies registered under the Companies Act are either

1. Companies Limited By Share

2. Companies Limited By Guarantee

3. Unlimited Companies


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Companies Limited By Share

It is a registered company having the liability of its members limited by its memorandum

of association to the amount, if any, unpaid on the shares respectively held by them.

The amount remaining unpaid on the shares can be called up at any time during the

lifetime of the company or at the time of winding up.

His personal assets cannot be called upon for the payment of the liabilities of the company,

if nothing remains to be paid on the shares purchased by him. such a company is also

known as a Share Company.

A company limited by shares may be a public company or a private company.

There are two most popular types of companies

1. Private Limited Companies

2. Public Limited Companies


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Private Limited Companies

A company which has a minimum paid up capital of one lac rupees or such higher paid-up

capital as may be prescribed and by its articles-

Restricts the right to transfer its shares, if any;

Prohibits any invitation to the public to subscribe for any share in, or debentures of, the

company;

Prohibits any invitation or acceptance of deposits from persons other than its members,

directors or their relatives.

Limits the number of its members to 50; not including:

a. Person who are in the employment of the company;

b. Person who, having been formerly in the employment of the company, were

members of the company while in that employment and have continued to be

members after the employment.


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Every private company existing on the commencement Act, 2000. A company

registered under section 25 shall not be required to have minimum paid up

capital, this restriction are mandatory provision of a private limited company.

Words Private Limited should be used at the end of the companys name.

A Private company must have its own Articles of Association. A Private

company is classified into:

i. Companies Limited by shares;

ii. Companies limited by guarantee(if it has a share capital);

iii. Unlimited Companies(if it has a share capital);

iv. Producer Companies.


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Public Limited Companies

A company other than the private company or which is not a private company is

a public company.

Any 7 or more persons can join hands to form a public company. Its maximum

membership is unlimited.

By Companies Act, 2000, a public company shall mean a company, which-

i. Is not private company;

ii. Has minimum paid up capital of 5 lac rupees or such higher paid up

capital, as may be prescribed;

iii. Is a private company which is a subsidiary of a company which is not a

private company


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Company fails to enhance its paid up capital of 5 lac

rupees within the period of two years, such company

shall be deemed to be a defunct company and its name

shall be struck off from the register by the Registrar.

A public company is further classified into:

i. Companies Limited by shares;

ii. Companies limited by guarantee;

iii. Unlimited Companies


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Companies Limited By Guarantee

These types of companies may or may not have a share capital. The working

funds, if required, are raised from source like fees,donation,subsidy,grant.

Each member promises to pay fixed sum of money specified in the

Memorandum in the event of liquidation of the company for payment of the

debt and liabilities of the company[Sec. 13(3)]. This amount promised by him is

call Guarantee.

The amount guaranteed by each member is in the nature of reserve capital. This

amount can not be called upon except in the event of winding up the company.

Non-trading or non-profit companies formed to promote culture, art, Science,

religion, charity, etc.., are formed as companies limited by guarantee.


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Unlimited Companies

The liability of the member in these company is unlimited

like an ordinary partnership firm, in proportion to his interest

in the company.

A company not having any limit on the liability of itsmembers is called Unlimited company.

Section 12 gives choice to the promoters to form a company

with or without limited liability.

An unlimited company may or may not have a share capital.

If it has a share capital it may be public or private company.

C i R i d f P i


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Companies Registered for Promoting

Commerce, Art, Science, Etc.

Central Government has powers under section 25 of the Act,

to direct by license that the association may be registered as a

company with limited liabilities without the addition to its

name of the word Limited or Private Limited

1. The satisfaction of the Central Government that an

association is about to be formed as a limited company for

promoting commerce, art or any other useful objective.

2. Association intends to prohibit the payment of any dividend

to its members.


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Government Companies

Any Company in which not less than 51% of the share capital isheld by the Central Government or by the State Government or

partly by the Central Government and partly by one or more

State Government is called a Government company.

The central Government under section 620 of the Act is

empowered to declare by notification in the Official Gazette that

any of the Act shall not apply to any Government company.

The concept of the Government companies is enlarged by the

Amendment Act, 1974.


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Foreign Companies

A company incorporated outside India is a foreigncompany. Section 592 to 608 of the Companies Act

apply to foreign companies.

If not less than 51% paid up share capital (whether

equity or preference), of a company incorporated

outside India and having an established in India, is held

by one or more citizens of India


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Producer Companies

The introduction of Producer Companies by companies

Amendment Act, 2000 with effect from 06.02.2003 provides

for corporate governance of members joining together to

achieve specified objective.

The registration of a Producer Company enables incorporation

of Co-operatives as companies and conversion of existing co-

operatives into companies on optional basis.

Producer Company means a body corporate registered under

the Companies Act, 1956 as a Producer Company.


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ProspectusDefinition [Sec. 2(36)]

Section 2(36) of the Act defines prospectus as:

prospectus means any document described or issued asa prospectus and includes any notice, circular,advertisement or other document inviting deposits fromthe public or inviting offers from the public for thesubscription or purchase of any shares in, or debenturesof a body corporate.

PROSPECTUS


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PROSPECTUS[Sec. 44(2)(a) & 56]

Every prospectus issued by or on behalf of a company orby or on behalf of any person who is or has been engagedor interested in the function of a company shall state thematters specified in part 1 of schedule 2 and set out thereports specified in part 2 of schedule 2 subject to theprovisions contained in part 3 of schedule 2.


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Dating of prospectus [Sec. 55]: Prospectus shall bedated and that date shall be taken as the date ofpublication of the prospectus.

Registration of prospectus [Sec. 60]: No prospectusshall be issued unless on or before the date of itspublication, a copy of the prospectus has been delivered

to the Registrar for registration duly signed by everyperson who is named therein as a director or proposeddirector of the company.


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Civil liability Compensation

Damages for deceit or fraud

Recission of the contract for misrepresentation

Liabilities for non compliance with section 56

Liability under general law Penalty for contravening sections 57 & 58

Penalty for issuing the prospectus without delivering forregistration


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Criminal liability [Sec. 63(1) & 68]Every person who authorises the issue of prospectus shallbe punishable for untrue statement with imprisonment for

a term which may extend to 2 years or with fine whichmay extend to Rs. 50,000 or with both.

Fraudulently including person to invest money: Anyperson who either knowingly or recklessly makes anystatement , promises or forecasts which is false, deceptiveor misleading or by any dishonest concealment of material

facts, induces or attempts to induce another person toenter into:


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I. any agreement with a view to acquiring, disposing of,subscribing for, or underwriting shares or debentures;or

II. any agreement, the purpose of which is to secure aprofit to any of the parties from the yield or shares ordebentures , or by reference to fluctuations in thevalue of shares or debentures;

shall be punishable with imprisonment for a termwhich may extend to 5 years or with fine which mayextend to one lac rupees or with both.

MINIMUM SUBSCRIPTION


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MINIMUM SUBSCRIPTION

[Sec.69]No allotment shall be made of any share capital of acompany offered to the public for subscription unless theminimum amount is raised. The minimum amount whichshall be raised, is called, Minimum Subscription. This

minimum subscription is fixed by the Board of Directorsafter taking into account the matters specified in clause 5of part 1 to schedule 2 of the Act, i.e.,


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I. the purchase price of any property purchased or to bepurchased;

II. any preliminary expenses payable;

III. any commission payable towards subscription of anyshares;

IV.the repayment of any money borrowed by thecompany for the above matters;

V. working capital;

VI. any other expenditure.

C di i f b i i ifi f


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Conditions for obtaining certificate of commencement

1. At least minimum subscription has been raised;

2. Every director of the company has paid to the company, oneach of the shares taken by him or agreed to be taken byhim the amount payable by him on application andallotment of the shares;

3. Obtain or apply for permission for dealing of the shares ordebentures on the recognised stock exchange so that nomoney is repayable to applicants for any shares ordebentures offered for public subscription by reason of anyfailure to apply for, or to obtain stock exchange permission;

4. There has been filed with the registrar a duly verifieddeclaration by one of the directors or the secretary or of thesecretary in whole time practice that the above provisionshave been complied with [Sec. 149(1)].


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SEBI Guidelines

The companies issuing securitiesoffered through an offer documentshall satisfy the following at the time of

filing the draft offer document withSEBI, and also at the time of filing thefinal offer document with the Registrar

of Companies/ Designated StockExchange.


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(No issuer company shall make any public issueof securities, unless a draft Prospectus has beenfiled with the Board through a Merchant

Banker, at least 30 days prior to the filing of theProspectus with the Registrar of Companies

(ROC): Provided that if the Board specifies changes or

issues observations on the draft Prospectus(without being under any obligation to do so),

the issuer company or the Lead Manager to the

Issue shall carry out such changes in the draft Prospectus or comply

with the observations issued by the Board before filing the Prospectus

with ROC.


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Provided further that the period withinwhich the Board may specify

changes or issue observations, if any,

on the draft Prospectus shall be 30 days from the date of receipt of the

draft Prospectus by the Board.


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Provided further that where the Boardhas made any reference to or

sought any clarification or additional

information from any regulator or such other agencies, the Board may

specify changes or issue

observations, if any, on the draft Letter

of Offer after receipt of comments or reply from such regulator

or other agencies .

Companies barred not to issue


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Companies barred not to issuesecurity

No company shall make an issue ofsecurities if the company has been

prohibited from accessing the capital

market under any order or direction passed by the Board.


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ADVANTAGES OF PUBLIC


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ADVANTAGES OF PUBLICISSUE

For public company:-

Able to raise funds and capital through the sale of itssecurities

Public companies may issue their securities as compensationfor those that provide services to the company likeDirectors,employees,etc

For private company:-

No requirement to publicly disclose financial information

Spends less for certified public accountants and otherbureaucratic paperwork required of public companies

wealth and income of the owners remains relatively unknownby the public.


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CONTD.

Other:- shareholders enjoy limited liability

additional capital can be raised by issuing moreshares or debentures

it enjoys greater borrowing power board of directors with expertise/experience can be

appointed to take decisions and delegatesresponsibilities

shareholders can sell/transfer their shares freely


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CAPITAL

Capital refers to the amount invested in thecompany so that it can carry on itsactivities. In a company capital refers to"share capital". As the total capital of the

company is divided into shares, the capitalof the company is called share capital. Theamount of the capital is mentioned in thecapital clause of the Memorandum ofAssociation registered with the Registrar ofthe Companies


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TYPES OF SHARE CAPITAL

Nominal/Authorized/Registered capitalIt refers to the maximum amount of sharecapital which a company is authorized to issueas per its Memorandum of Association.

Issued capital

Issued capital is that part of the authorizedcapital which the company offers to public, thatmay include vendors, for subscription orpurchase.

A company may issue its entire authorizedcapital or may issue it in parts from time to time

as per the needs of the company.


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Subscribed capitalPart of issued capital which is taken up or subscribedby those who are offered for subscription.

Company may receive application for equal to, morethan or less than shares issued. This capital can be

equal to or less than the issued capital. Paid up capital

It is the portion of called up capital which is paid by theshareholders, to calculate the paid up capital, theamount of installments in arrears is deducted from the

called up capital. Uncalled capital

It is that portion of the issued/subscribed capital that is

not called up by the company on the shares allotted.

SHARES h i th


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SHARESa share in thecapital of the company

TYPES OF SHARESTYPES OF SHARES

PREFERENCE SHARES

CUMULATIVE

REEDEMABLE

PARTICIPATING

NON-CUMULATIVE

IRREDEEMABLE

NON-PARTCIPATING

EQUITY SHARES


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Preference sharesA preference share is one which carries

following preferential rights over other type ofshares called equity shares in regard to thefollowing :

A) Payment of dividendB) Repayment of capital at the time of winding

up of the company. Equity shares

All shares which are not preference sharesare equity shares. Holders of these sharesreceive dividend out of the profits of thecompany after the payment of dividend hasbeen made to the preference shareholders.


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ALLOTMENT OF SHARES [Secs.69 70 72 & 73]

The allotment of shares by the company shall be made inaccordance with sections 69, 70, 72 and 73 of thecompanies Act. Application for shares is an offer and

allotment of shares by the company is an acceptance ofthe offer. Allotment can be made on a written or an oralapplication.

The following rules are to be observed:


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The following rules are to be observed:

1. A prospectus or a statement in lieu of prospectus shall be filedwith the registrar.

2. No allotment of shares shall be made to public unless the

minimum subscription amount stated in the prospectus is raisedand received by the company.

3. Application for shares should be made to the company in theprescribed form called ApplicationForm.

4. No allotment shall be made untill the beginning of the 5th day

after a date on which the prospectus is issued.5. The beginning of the 5th day or such later time shall be called

time of the opening of the subscription list.

6. Every company intending to offer shares or debentures to thepublic shall make an application to one or more recognised stockexchange for permission.

7. The amount payable on application on each share shall not beless than 5% of the nominal amount of the share.

8. The whole of the application money should have been paid toand received by the company in cash.

TRANSFER OF SHARES [S


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TRANSFER OF SHARES [Secs.82, 108- 113]Meaning of transfer

The word 'transfer' is an act of the parties by which title to

property is transferred from one person to another. Theword 'transmission' is preferable to devaluation of title byoperation of law. It may be by succession or bytestamentary transfer.


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Shares of a company are freely transferable subject to therestrictions contained in the companies Act, any otherstatutes and the provisions of the Memorandum andArticles of Association of the company (section 82).However, in case of private company, by its verydefinition, there has to be restrictions on the transfer ofshares. But in the case of a listed company / unlisted

public company, after the enactment of Depositories Act,1996, the securities have become freely transferable.Even the Board of Directors cannot refuse transfer ofshares on any ground.

Sections 108 -113 provide the rules and regulations for transfer


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Sections 108 -113 provide the rules and regulations for transferof shares.

Instrument of transfer (Sec 108)

A company shall not register a transfer of shares of, thecompany, unless a proper transfer deed in Form 7B as given inthe Companies (Central Government's) General Rules andForms, 1956 duly stamped and executed by or on behalf of thetransferor and by or on behalf of the transferee and specifyingthe name, address and occupation, if any, of the transferee,has been delivered to the company, alongwith the certificate

relating to the shares, or if no such certificate is in existence,alongwith the letter of allotment of the shares.

Transfer of instrument in prescribed form and presentation


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Transfer of instrument in prescribed form and presentation

Section 108 requires that where share transfer form is delivered tothe Board it should be duly stamped. It means stamp of adequate value

should be affixed and cancelled on transfer deed.

Determination of valuation of shares for affixing stamps on thetransfer deedIt was held in Union of India v Kulu Valley Transport Ltd. (1958) that in caseshares are not quoted, the value of the shares for the purpose of stampmeans the price that the shares would fetch at the time of transfer orconsideration agreed, whichever is higher. However, no transfer duty isapplicable for transfer of shares in case of shares are in Dmat form.Value of share transfer stamps to be affixed on the transfer deedStamp duty for transfer of shares is 25 paise for every Rs. 100 or part

thereof of the value of shares as per Notification No. SO 130(E), dated 28-01-2004 issued by the Ministry of Finance, Department of Revenue, NewDelhi.Transfer procedure not applicable under the depositories systemSection 108(3) provides that the provisions of section 108 shall not apply to

transfer of securities under the depositories system.

Time limit for presentation


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pIn the case of listed company, at any time before the date on which theregister of members is closed, in accordance with law, for the first time afterthe date of the presentation of the prescribed form to the prescribedauthority under clause (a) of section 108(1A) or within twelve months fromthe date of such presentation, whichever is later. In any other case, withintwo months from the date of such presentation.

Application for transfer (Sec. 110)(1)An application for the registration of a transfer of the shares or other

interest of a member in a company may be made either by the transferoror by the transferee.

(2) Where the application is made by the transferor and relates to partly paidshare, the transfer shall not be registered, unless the company givesnotice of the application to the transferee and the transferee makes no

objection to the transfer within two weeks from the receipt of the notice.(3) For the purposes of sub-section (2), notice to the transferee shall be

deemed to have been duly given if it is despatched by prepaid registeredpost to the transferee at the address given in the instrument of transfer,and shall be deemed to have been duly delivered at the time at which it

would have been delivered in the ordinary course of post.

Transfer by legal representative (Sec. 109)


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A transfer of the share or other interest in a company of a decreasedmember thereof made by his legal representative shall, although the legalrepresentative is not himself a member, be as valid as if he had been a

member at the time of the execution of the instrument of transfer.

Transmission by operation of law

The company may register as shareholder any person to whom the rights of

any shareholders of the company have been transmitted by operation oflaw.

Registration of transfer

I. a transfer of share is complete by registration with the company. Thetransferee becomes a member of the company only when the transfer isregistered by the company;

II. the company shall cancel the name of the transferor from the register ofmembers and enter in his place the name of the transferee. Thetranferor continues to be holder of the shares until his name is so

cancelled.

Share certificate


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Share certificate

A new share certificate is issued to the tranferee or the old share certificateis endorsed to the transferee, if all the shares mentioned in the old

certificate are transferred to the transferee.

Time limit for issue of certificate on transfer (Section-113)

Within a period of two months in case of unlisted companies Within a period of one month in case of a listed companies


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companies law (1)-group9

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