Certificate No. in Share Certificate in case of Share Transfer

[Arpit]

Dear Colleagues,

Request to accord inputs on the below mentioned query :

Mr. A is holding 50000 Shares in Company Y. The Share Certificate that is given to Mr. A contains distinctive no. 50001-100000 and Certificate No. 02. As on date, there are a total of 6 Shareholders in the Company. The last Certificate no. allotted was No. 06.

Now, Share Transfer took place of Mr. A holding(Holding of Mr. A was split and Board resolution was duly passed before Share Transfer) in the Company Y in the following manner :

To Mr. B ( Existing Shareholder)- 20000 Shares - Distinctive No.- 50001-70000 - New Certificate No. - 07

To Mr. C ( Existing Shareholder)- 18000 Shares - Distinctive No.- 70001-88000 - New Certificate No. - 08

To Mr. D ( Existing Shareholder)- 12000 Shares - Distinctive No.- 88001-100000 - New Certificate No. - 09

The Folio No. of Mr. B, Mr.C and Mr. D will remain unchanged. Share Transfer Deed was duly executed in all the cases mentioned above.

Certificate No. 02 given to Mr. A was taken back by Company and kept in their custody and was duly stamped mentioning "No. of Shares Split".

Does the Company followed the correct approach or any alteration is required at the end of the Company to effect such sort of Share Transfer ?

Thanks & Regards

 

[V Kartik]

Things are correct.

Prior to resorting to this exercise, Mr. A should send a letter to the company, requesting the company to split the share certificate no.2 in the following manner (as specified by you) & treat the old share certificate no.2 as cancelled after the shares are split.

(A circular resolution can also be passed for splitting the shares). After the splitting is done, the old share certificate shall stand cancelled & the same should also appear on the share certificate that the same is split & cancelled.

After that, transfer shall take place subject to receipt of payment to Mr. A.

If a circular resolution is passed, a proper resolution can be passed at a Board meeting (whenever held) to take note of the splitting & transfer of shares.

Kartik

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[Arpit]

Thank you Mr. V Kartik for your valuable inputs.

Yes, the application was duly received from Mr. A. In addition to split, will add on the word cancelled on Certificate No.02 for record purpose.

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[Tanvi Aggarwal]

I just want to ask the new share certificates were issued in the name of Mr. A and endorsement was done in the back right inorder to transfer those shares. If yes, the procedure was correct.

However if the shares were directly issued to Mr. B, C and D, then thats wrong because you mention the share certificate in the transfer deed. 

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[V Kartik]

Yes the new share certificates should be issued in the name of Mr. A

Kartik

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