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Distinguish Between Share Certificate and Share Warrant. - Secretarial Practice

Share certificate and Share Warrant.

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Solution

  Share certificate Share Warrant
1

Meaning

A share certificate is the registered document of title to the shares, issued by the company under its common seal

A share warrant is a document issued under a common seal of a public company stating that the bearer of instrument has the title of the shares mentioned there in.
2

Who issue the document?

It is issued by public as well as private company.

Only Public limited companies can issue Share warrants.
3

Nature of Shares as regards paid up value?

A share certificate can be issued for fully paid as well as partly paid shares

It is issued only in case of fully paid shares
4

Time of Issue

A company initially (at first) has to issue share certificate

After collection of the amount if the shareholder wishes, company can issue share warrant against the share certificate

5

Sanction of government

Central Government’s sanction is not required to issue share certificate.

After collection of the amount if the shareholder wishes, company can issue share warrant against the share certificate.
6

Provision in the Articles

Provision to issue share certificate is not necessary in Articles.

Articles must provide for issue of share warrant.
7

Stamp Duty

The stamp duty on issuing share certificate is nominal

Heavy stamp duty is to be paid on the issue of share warrant.
8

Negotiability

Share Certificate is not a negotiable (transferable) document.

Share Warrant is a negotiable document. Anyone holding the instrument can get the ownership of shares
Concept: Issue of Share Certificate and Share Warrant
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