Good afternoon, I have invested in an existing Indian Company in 2011 as per the CA 1956. After my investment, i have been issued with a certificate with a nu of shares and the price by the exisiting Directors. Today, i have noticed that the certificate suffers from an IRREGULARITY, as I never have signed any share transfer form as per the CA 1959. hence is this Certificate of shares void or not ? And what can i ask to the CLBoard the reimbursement of my investment due to this IRREGULARITY ? Thank you for your feedback.
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1) it is necessary for transfer of shares in physical form that transfer deed signed by transferor and transferee and duly witnessed
2) further transfer deed should be duly stamped
3) in case procedure prescribed by companies act 1956 is not followed
any transfer in violation of the provisions of companies act would be void
1. Is it a listed or an unlisted company?
2. The shares are validly transferred against a proper Share Transfer Deed. If it is an unlisted and private company then a share transfer deed had to be obtained from ROC office, the validity whereof is for 12 months from the date which appears on the face of the deed or book closure date declared by the company which ever is earlier.
3. In Companies Act, 1956 transfer of share is governed by Section 108. As per section 108 registration of transfer of shares is possible only if a proper transfer deed in Form 7B duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company, along with the share certificate. It is void. The CLB can be petitioned for reimbursement .
As per section 84 of Companies Act, 1956:
1) A certificate, under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member to such shares.
(2) A certificate may be renewed on a duplicate of a certificate may be issued if such certificate :
(a) is proved to have been lost or destroyed, or
(b) having been defaced or mutilated or torn is surrendered to the company.
(3) If a company with intent to defraud, renews a certificate or issues a duplicate thereof, the company shall be punishable with fine which may extend to ten thousand rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one lakh rupees, or with both.
(4) Notwithstanding anything contained in the articles of association of a company, the manner of issue or renewal of a certificate or issue of a duplicate thereof, the form of a certificate (original or renewed) or of a duplicate thereof, the particulars to be entered in the register of members or in the register of renewed or duplicate certificates, the form of such registers, the fee on payment of which, the terms and conditions, if any (including terms and conditions as to evidence and indemnity and the payment of out-of-pocket expenses incurred by a company in investigating evidence) on which a certificate may be renewed or a duplicate thereof may be issued, shall be such as may be prescribed.
