Signing of share certificates

[Vivek Hegde]

Dear all

 

As u knw share certificates should be signed by two directors and one authorised signatory.

 

In case company has nobody to authorise or not authorised anybody to sign how to comply with the provisions of the Rules..

 

Express your views..

 

rgds

CS Vivek Hegde,B.com, ACS, CWA
Company Secretary in Practice
No. 405, 4th Block, 7th Cross
Koramangala, Bangalore-560034
Mob: 9019756940

[SUNIL KUMAR B.G.]

Dear Vivek,

 

 

I think there is no other alternative way than authorising any 2 directors and a CS/authorised signatory to sign the share certificates.

 

 

 

Warm Regards,

 

 

Sunil Kumar B.G.

[Rajesh Warrier]

 

Dear Vivek,

 

Actually Share Certificates need not be signed by the Directors.......if you see Companies (Issue of Share Certificates) Rules, 1960, Rule 6 reads as under:

 

every share certificates shall be issued under the common seal of the company, which shall be affixed in the presence of two directors and/or Secretary or other authorised persons.

 

So in my opinion the signature on share certificates are for evidencing the presence of directors at the time of affixing the common seal on the certificates.

 

Now, coming back to your problem..... please see what is stated in your Articles regarding affixing the common seal of the Company.......or else if your company has adopted Table A, the share certificates need to be signed by 2 directors and secretary and practically if the Company does not have a secretary, then common seal should be affixed in the presence of 2 directors.....

 

Other views solicited.....

--
Thanks
Regards
Rajesh A
Company Secretary
Kochi
Mob: 09846874314

[Vivek Hegde]

Dear Sunil

 

Thanks for ur response. But in the relevant case company has no employees/officers other than 2 directors. Can we authorise any outsider as Authorised Signatory?

 

rgds

 

Mob: 9019756940

[Vivek Hegde]

Dear Rajesh

 

I do not agree with u...

 

Here is the extract of the Rules

Every share certificate shall be issued under the seal of the company, which shall be affixed in the presence of
(i)	two directors or persons acting on behalf of the directors under a duly registered power-of-attorney ; and
(ii)	the secretary or some other person appointed by the Board for the purpose. The two directors or their attorneys and the secretary or other person shall sign the share certificate.

 

So directors has to sign....

 

rgds

 

Koramangala, Bangalore-560034
Mob: 9019756940

[Rajesh Warrier]

 

Dear Vivek,

 

I did not say that I Directors do not have to sign the share certificates.....

 

What I tried express is that the signatures that we are putting on the share certificates are not for approving the shares certificates but as a procedural requirement for affixing the common seal on share certificates......

[SUNIL KUMAR B.G.]

Dear Vivek,

 

Thanks for a gist of provision, which clears one part of the problem

 

 

if you read the second line of the provision given in your mail.

 

I think the board can authorise other person to sign along with 2 directors.but the problem is here can board authorise a third person to sign on behalf of the company.?

 

I request our group member those who come accross similar situation, to guide to solve this problem.

 

 

Meanwhile let me go through some books. if i find some solution i'll get back.

[raja karthik]

Dear Vivek,

 

I feel that the one of the directors can also be authorised to sign as "Autorised Signatory".

 

 

Regards,

Karthik

 

[Vivek Hegde]

You mean to say director has to sign in his capacity as Director as well as an Authorised Signatory?

[Rajesh Warrier]

 

Dear Members,

 

Shall I put a different question here.....if the Articles of a Company says that the common seal of the Company shall be affixed on any documents, certificates etc..... in the presence of 4 directors......how many signatures should be there in share certificates???

 

Two Directors and Authorised Signatory enough?????

[Vivek Hegde]

Dear Rajesh

 

I dont thing all directors who hav witnessed the putting of common seal should sign Share Certificate.

 

Both provisions are different.

 

rgds

 

 

Koramangala, Bangalore-560034
Mob: 9019756940

[Rajesh Warrier]

 

Dear Vivek,

 

My conclusion is as under:

 

The rule we have discussed provides for affixing the common seal in the presence of two directors and an authorised signatory who shall sign the share certificates. Here the emphasis is on affixing the common seal and witness to common seal rather that approving the share certificates.

 

Thus, if your Company has got only two directors, they can witness affixing the common seal and sign the share certificates (being witness to affixing the common seal) and there is no requirement of an authorised signatory signing the certificate.

[Vivek Hegde]

Discussions held in our sister forum (CA Club) on the subject is enclosed.

 

rgds

 

Koramangala, Bangalore-560034
Mob: 9019756940

[chakri hegde]

Dear All,

Further to our discussion on the signing of share certificate, I have the following opinion:

The Companies (Issue of Share Certificate ) Rules, 1960 clearly says that,

Share Certificate should be signed by Two Directors or their power of  attorney holders and Company Secretary (if any) or any other person. 

Here any other person means, even an outsider who is holding a valid Power of Attorney issued by the Board of Directors for signing the Share Certificate.

Therefore, along with  two directors even an outsider having POA  by the Board of Directors can sing the Share Certificate.

Other views are invited.............

---------------------
With Best Wishes
Chakri G Hegde
Nissin Foods India Ltd.
Bangalore

[Narayan S]

Hi Vivek

 

Can you please be specific whether the company has nobody to authorise in sense the directors are abroad or for what reasons.

 

Regards

S.Narayan

On Thu, Aug 6, 2009 at 11:39 AM, Vivek Hegde <vivekhe...@gmail.com> wrote:

--
Regards
S.Narayan

[raja karthik]

Dear all,

 

My views :

 

Articles specifically say 2 directors and a CS/ Apppointed person of the Board to be present and only those person to sign any instrument on which common seal is affixed.

 

Rules specifically say that share certificate shall be sealed and the seal be affixed in the presence of 2 directors and  CS/ Apppointed person of the Board 2 directors and 2 directors and cs or other person to sign the certificate.

 

NOW EVEN I DONT KNOW WHETHER PUTTING SIGNATURE IS WITNESSING OR SIGNING THE DOCUMENT..

THE ARTICLES SAY "SHALL SIGN THE INSTRUMENT" EVEN THE RULES SAY "SHALL SIGN THE SHARE CERTIFICATE"

 

IS IT SIGNING OF INSTRUMENT OR WITNESSING THE AFFIXATION OF COMMON SEAL OR BOTH ? ?

 

 

WHY THE COMMON SEAL IS AFFIXED ... TO SHOW THAT THE COMPANY IS SIGNING SOME INSTRUMENT.... WHY SOME DIRECTORS AND OTHER PERSON IS ASKED TO BE PRESENT AT THE AFFIXATION OF COMMON SEAL ... BECAUSE COMPANY CANNOT COME AND AFFIX THE COMMON SEAL... SOME OF THE AUTHORISED PERSON HAS TO AFFIX THE COMMON SEAL... WHEN THOSE PERSON SIGNS THE DOCUMENT .... IT IS AS GOOD AS COMPANY SIGNING THE DOCUMENT.... AFTER THAT IT IS NOT NECESSARY AGAIN FOR DIRECTORS TO SIGN... IF AT ALL THEY ARE SIGNING THEY SIGN ON BEHALF OF THE COMPANY ONLY  ...

 

I DONT KNOW WHAT I WRITTEN ABOVE....

 

MEMBERS PLEASE EXPRESS VIEWS...

 

 

REGARDS,

KARTHIK

[Narayan S]

Dear Vivek

 

Regarding the signing of the share certificate, as i read the rules i am of the view that

 

Two people are required to sign the same as below:

 

a. 2 directors (One will be the MD if there is one) or any two persons as authorised by the PoA - It means they can authorise anyone to act on their behalf and whatever action they perform it will make the directors liable since they have given the POA on their names.

 

                                                   AND

 

b. Secretary (if the company has) or any person who is authorised by the Board. In sense this can also be any person but the Board has to authorise him / her by resolution passed in the Board. This second person's signature is mainly a witness sort of thing.

 

In either case the "Other Person" is representing on behalf of the board and any wrong action done by that person the Board will be held responsible.

 

In your case you have to get POA on any 2 persons executed by your Directors and also a board resolution for 3rd person to sign in place of secretary.

 

Regards

S.Narayan

On Thu, Aug 6, 2009 at 11:39 AM, Vivek Hegde <vivekhe...@gmail.com> wrote:

--
Regards
S.Narayan

[yoganand l]

see the Rules in their totality. the Rules shall apply notwithstanding to anything contained in the Articles. So even if your AoA insists for signatures of four directors or whatever, the no. of persons as are required to sign the Share Certificate as is provided in the Rules shall prevail.

 

yogan.

[Vivek Hegde]

Past Discussion and conclusion FYI

 

rgds

 

Vivek

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[CS.SUNIL KUMAR B.G.]

Thanks Mr.Vivek for sharing this discussion mail.

it is conclusive that 2 directors and an authorised signatory is mandatory for signing the share certificate. directors cannot play dual roles in this matter.

if someone has faced the similar situation,please share your views.


Additional views are welcome....

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Warm Regards,

CS.Sunil Kumar B.G.
B.B.M.,A.C.S.,(L.L.B.)
Mysore