Difference between Share Certificate and Share Warrant

Difference between Share Certificate and Share Warrant

Share Certificate

Share CertificateDefinition – A Share Certificate is a registered evidence of title to the shares issued by a company under its common seal, duly stamped and signed by one or more directors or by the company secretary as per the Articles.

♦ It is an acknowledgment of the shares issued to the shareholder

♦ It contains the details about the class of shareholder, distinctive number of share and amount paid on the share.

A share certificate must be issued within 3 months after the allotment of the shares or 2 months after the application for the registration of the transfer. It contains the following details →

  • Name of the company
  • Name and address of shareholder
  • Share certificate number
  • Common seal
  • Stamp and signature of two directors and counter signature of the company secretary

In case of loss a duplicate share certificate is issued. In case of fraud issue of certificate there is a fine up to Rs. 10,000 and imprisonment up to 6 months.

Format of a Share Certificate :

share certificate format

 

Share Warrant

 

Definition – A Share Warrant is a document issued under the common seal of the company stating that the bearer has the number of shares specified there in it is a negotiable instrument and it can be transferred by mere delivery.

 ♦ A Public Company limited by shares can issue share warrant if they are fully paid up.

♦ It can be only issued if there is a provision in articles of association for issuing share warrant.

♦ It requires approval of Central Government before it is issued.

♦ A private Company cannot issue a share warrant.

♦ The bearer of the Warrant is not a member of the company. 

♦ It does not contribute towards qualification shares held by the directors. 

♦ It can be transferred but it does not require any stamp duty.

 

Difference between Share Certificate and Share Warrant

 

Share Certificate

Share Warrant

A bearer of Share Certificate is entered in the Register of Members of the Company.Bearer of a Share warrant is not entered in the Register of Members of the Company.
A share Certificate requires certain procedures and stamp duty for transfer.It Can be easily transferred by mere delivery
It takes time for such transferMere delivery entitles spot transaction
It is not a negotiable instrumentIt is a kind of interest and ownership of the company
No coupons shall be attached with Share Certificate. Dividend may be declared separately if profit arise.Coupons of dividend may be attached to Share Warrant
It can contribute towards qualification shares held by a directorIt cannot contribute towards qualification shares held by a director
A bearer of Share certificate has several rights like right to vote, to participate in a meeting and to be a directorA bearer of Share warrant has no such rights
It is a registered evidence of titleIt is a bearer document of title
Both Private and Public companies can issue Share CertificateOnly Public Companies can issue share warrant
Issue of Share Certificate does not require approval of Central GovernmentIt requires prior approval
It is issued in respect of partly or fully paid up sharesIt is issued in respect of only fully paid up shares

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sumita goel

KINDLY TELL ME THE FORMAT OF SHARE CERTIFICATE IN PRIVATE COMPANY WHEN ONE DIRECTOR HAS RESIGNED AND OTHER REMAINING DIRECTOR ACCEPTED HIS SHARES