Question

Distinguish Between Share Certificate and Share Warrant.

Answer 1

Sr. no.	Aspect	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 therein.
2.	Who issues the document?	It is issued by public as well as private companies.	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 a share certificate.	After collection of the amount, if the shareholder wishes, the company can issue a share warrant against the share certificate.
5.	Sanction of government	The Central Government’s sanction is not required to issue a share certificate.	The Central Government’s prior approval/sanction is required to issue a share warrant.
6.	Provision in the Articles	Provision to issue a share certificate is not necessary in Articles.	Articles must provide for the issue of share warrants.
7.	Stamp Duty	The stamp duty on issuing share certificate is nominal	Heavy stamp duty is to be paid on the issue of share warrants.
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.