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A Share Certificate is a written document which serves as a legal proof of a shareholder's ownership of shares in a company. The share certificate is often issued by companies to shareholders after an allotment has been made or after a transfer or transmission of shares.
This document includes the name of the company and registration number of the company whose shares is being issued, the certificate number, the particulars of the holder(s) of the shares, the class(es) of shares being issued, date of issue, the amount paid on each share etc.
This document can only be used by the following type of companies:
Note that this document can not be used by a company limited by guarantee as this type of company does not have shares.
How to use this document
This document is used in the following circumstances:
The law provides that share certificate must be issued within 2 months after new shares have been allotted or within 3 months after shares have been transferred to another. After filling this form, the document should be printed on a thick paper (the papers usually used for printing certificates).
According to the law, a share certificate may be issued either under the company's common seal or signed by a deed. This means that the old requirement of issuing share certificates under a company's common seal only has been modified. The certificate should be signed by one director and one secretary of the company. The company should issue the share certificate to the named holder of the shares and keep a copy for record purposes.
Note that after the certificate has been issued, the company is required to enter the names of new shareholders in the company's register of members.
The Companies and Allied Matters Act, 2020 applies to this document.
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A guide to help you: The Procedure for Transferring Company Shares
Other names for the document: Stock Certificate, Share Certificate of a Company, Share Certificate for an Unlimited Liability Company, Share Certificate for a Company Limited by Shares, Share Certificate for a Private Company Limited by Shares