Share Certificate: What Is It About?

Every member of a company whose name is mentioned in the company’s Register of Members is entitled to receive a share certificate or certificate share. Share certificates acts as an evidence for the shares of a shareholder in the company. The certificates of shares shall bear the company seal, the amount paid, the name of the shareholder, and must specify the related shares. It shall also bear the signatures of minimum of two directors and the company secretary.

 Certificate Share: What Is Its Objective?

The main purpose of issuing a certificate share is to have an evidence of the shares that a shareholder holds in a company. Once the company has issued shares in the name of a person, it cannot deny him the benefits that he is entitled to. Two types of estoppel are created by a share certificate:

• Estoppel as to Title: This type of estoppel creates a liability on a company, wherein it cannot refuse the entitlement of a person to his shares, if it has legally issued those shares on his name. Therefore, by issuing a share certificate on the name of a person, the company actually declares that the person is a shareholder in the company.
• Estoppel as to Payment: If it is stated in a certificates of share that the shares are fully paid, then it is considered that the amount stated in the certificate has actually been paid and the same cannot be denied by the company.