A share certificate is a vital legal document that establishes proof of ownership in a company. When the original certificate is lost, misplaced, stolen, or damaged, it can cause challenges in proving ownership or transferring shares. To safeguard investors, the Companies Act, 2013 and related rules provide a clear framework for the issue of duplicate share certificates.
When is a Duplicate Certificate Issued?
A duplicate share certificate is issued in cases of:
Loss or misplacement of the original.
Theft or destruction due to fire, flood, or accidents.
Mutilated or torn certificates that cannot be used.
Legal Requirements
The issue of duplicate share certificates must comply with Section 46 of the Companies Act, 2013 and Rule 6 of the Companies (Share Capital and Debentures) Rules, 2014. Key requirements include:
Approval of the company’s Board of Directors.
Maintenance of a register of duplicate certificates.
The duplicate must be clearly marked as “Duplicate” to prevent fraud.
Payment of prescribed fees, if applicable.
Procedure for Obtaining a Duplicate Share Certificate
Immediate Intimation – Shareholder informs the company or its registrar and transfer agent (RTA) about the loss.
FIR Filing – A First Information Report (FIR) with the local police is mandatory in case of loss or theft.
Affidavit & Indemnity Bond – The shareholder provides an affidavit confirming the loss and an indemnity bond indemnifying the company against future claims.
Public Notice (if required) – Companies may request a newspaper advertisement as a safeguard.
Board Approval & Issuance – After verifying documents, the Board approves the request, and the duplicate share certificate is issued.
Conclusion
The issue of duplicate share certificate is a legal safeguard that ensures shareholders do not lose their rights due to missing or damaged documents. By following the prescribed procedure and fulfilling compliance requirements, investors can restore ownership records and secure their investments without risk.
