G.S.R.333 – In exercise of the powers conferred by clause (b) of sub-section(1) of section 642 of the businesses Act, 1956 (1 of 1956), and in supersession of the businesses (Issue of Share Certificates) Rules, 1959, published with the notification of the govt of India within the Ministry of Commerce and Industry (Department of Company Law Administration) No. G. S. R. 798, dated the 30th June, 1959 the Central Government hereby makes the subsequent rules, namely:-
1. Short title. – These rules could also be called the businesses (Issue of Share Certificates) Rules 1960.
2. Effect of Rules. – These rules shall have effect notwithstanding anything to the contrary contained within the Articles of Association of a corporation .
3. Definitions. -In these rules, unless the context otherwise, requires, –
(a) “Act”, means the businesses Act, 1956 (1 of 1956).
(b) “Board” means the Board of Directors of a corporation or a Committee thereof consisting of not but three directors where the entire number of directors exceeds six and not but two directors where the entire number doesn't exceed six :
Provided that, to the extent that the composition of the Board of Directors permits of it, a minimum of half the amount of members of the Committee shall contains directors aside from (i) a managing or whole time director or,
(c)“Seal” means the harbor seal of a corporation .
4. Issue of Share Certificates. –
(1) When a corporation issues any capital, no certificate of any share or shares within the company shall be issued except :
(i) in pursuance of a resolution gone by the Board ; and
(ii) on surrender to the corporate of its letter of allotment or of its fractional coupons of requisite value, save in cases of issues against letters of acceptance or of renunciation, or in cases of issue of bonus shares :
Provided that if the letter of allotment is lost or destroyed, the Board may impose such reasonable terms, if any, on evidence and indemnity and therefore the payment of out of pocket expenses incurred by the corporate in investigating evidence, because the Board thinks fit.
(2) No certificate of any share or shares shall be issued either in exchange for those which are sub-divided or consolidated or in replacement of these which are defaced, torn or old decrepit, worn-out, or where the cases within the reverse for recording transfers are duly utilized, unless the certificate in lieu of which it's issued is surrendered to the corporate :
Provided that the corporate may charge such fee, if any, not exceeding Rs. 2 per certificate issued on splitting or consolidation of share certificates or in replacement of share certificates that are defaced or torn, because the Board thinks fit.
(3) No duplicate share, certificate shall be issued in lieu of these that are lost or destroyed without the prior consent of the Board or without payment of such fees, if any, not exceeding Rs. 2 and on such reasonable terms if any, on evidence and indemnity and therefore the payment of out-of-pocket expenses incurred by the corporate in investigating evidence because the Board thinks fit.
(4) the businesses listed with OTC Exchange of India, a corporation registered under section 25 of the businesses Act, 1956, may issue a jumbo share certificate in favour of Custodian and issue counter receipts to each allottee with reference to their holding.
Explanation.- For purposes of sub-rule (4), ” Custodian ” means an entity carrying on post-trade activities like , settlement of purchases and sales, information reporting, safe keeping of securities and/or participating in any clearing system for and on behalf of the client to effect deliveries of the securities.
5. sort of Certificates.-
(1) Every certificate shall specify the name (s) of the person (s) in whose favour the certificate is issued, the shares to which it relates and therefore the amount paid up thereon
(2) When any certificate is issued in any of the circumstances laid out in Rule 4, sub-rule (2), it shall state on the face of it and against the stub or counterfoil to the effect that it's ” Issued in lieu of share certificate No . ……………………………………………………………………………………………………….Sub‑divided/replaced/on consolidation of shares.”
(3)When any certificate is issued in any of the circumstances laid out in Rule 4, sub-rule (3), it shall state on the face of it and against the stub or counterfoil to the effect that it's a “duplicate issued in lieu of share certificate No. ……………………….. ” Further, the word “duplicate” shall be stamped or punched in bold letters across the face of the share certificate.
6. Sealing and Signing of Certificate.-
Every share certificate shall be issued under the seal of the corporate , which shall be affixed within the presence of
(i) two directors or persons working on behalf of the administrators under a duly registered power-of-attorney ; and
(ii) the secretary or another person appointed by the Board for the aim . the 2 directors or their attorneys and therefore the secretary or other person shall sign the share certificate.
Provided that, if the composition of the Board permits of it, a minimum of one among the aforesaid two directors shall be an individual aside from a managing or whole-time director.
Explanation.-For the aim of this rule, a director may sign a share certificate by affixing his signature thereon by means of any machine, equipment or other mechanical means like engraving in metal or lithography but not by means of a rubber stamp, as long as the director shall be liable for the safe custody of such machine, equipment or other material used for the aim .
7. Records of Certificates issued.-
(1) Particulars of each share certificate issued in accordance with rule 4, sub-rule (1) shall be entered within the Register of Members maintained within the form began within the appendix annexed hereto or during a form as near thereto as circumstances admit, against the name (s) of person (s) to whom it's been issued indicating the date of issue.
(2) Particulars of each share certificate issued in accordance with rule 4, sub-rules (2) and (3) shall be entered during a Register of Renewed and Duplicate Certificate indicating against the name(s) of the person(s) to whom the certificate is issued, the amount and date of issue of the share certificate in lieu of which the new certificate is issued, and therefore the necessary changes indicated within the Register of Members by suitable cross-references within the “Remarks” column.
(3) All entries made within the Register of Members or the Register of Renewed and Duplicate Certificate shall be authenticated by the secretary on such other person as could also be appointed by the Board for purposes of sealing and signing the share certificate under the provisions of rule 6
8. Printing of forms.-
All blank forms to be used for issue of share certificate shall be printed and therefore the printing shall be done only on the authority of a resolution of the Board. The blank form shall be consecutively machine-numbered and therefore the refore the forms and the blocks, engravings, facsimiles and hues concerning the printing of such form shall be kept within the custody of the secretary or such other person because the Board may appoint for the aim and therefore the secretary or other person aforesaid shall be liable for rendering an account of those forms to the Board.
9. Custody of books and documents.-
(1) the subsequent persons shall be liable for the upkeep , preservation and safe-custody of all books and documents concerning the difficulty of share certificates except the blank sorts of share certificates mentioned in rule 8, namely :-
(a) [Omitted]
(b) [Omitted]
(c) [Omitted]
(d) where the corporate features a director , the director .
(e) where the corporate has no director , every director of the corporate .
(2) All books mentioned in sub-rule (1) shall be preserved in good order permanently and every one certificates surrendered to a corporation shall immediately be defaced by the word “cancelled” being stamped or punched in bold letters and should be destroyed after the expiry of three years from the date on which they're surrendered, under the authority of a resolution of the Board and within the presence of an individual duly appointed by the Board during this behalf.
Provided that nothing during this sub-rule shall apply to cancellation of the certificates of security, under sub-section (2) of section 6 of the Depositories Act, 1996 (22 of 1996), when such certificates are cancelled in accordance with sub-regulation (5) of regulation 54 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 made under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 25 of the Depositories Ordinance, 1996 (Ord. 17 of 1996).
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