A word document telling you all about shares.

1. Meaning of share
Sec 2(46) of THE COMPANIES ACT,1956: “ A share is a share in the share capital
of a Company.”
Boreland Trustees v/s Steel Bros. & Co. Ltd.: “ A share represents the interest of
a share holder in the capital of the Company & this interest is measured by the
number of shares he is holding & the amount paid by him to the Company on
shares.” Thus, the amount of capital to be raised by a Company is always divided
into small parts or units of equal value & these units are called SHARES
 The person who owns the share is called shareholder.
 Share is one of the units into which total capital is divided.
 Share capital of the company is collected by issue of shares.
Meaning of shares according to company act 2013
Sub section 84of section 2 of the companies act 2013 defines” share” as below
share means a share in the share capital of a company and includes stock.
Share is one type of securities .securities is defined in sub section 80 of section 2
of said act,whoch refers to the definition of the securities as defined in clause(h) of
section 2 of the securities contract (Regulation)Act,1956 .

2. KIND OF SHARE CAPITAL (SECTION 43):
The share capital of companies limited by share shall be of two kinds, namely;
(a) equity share capital;
(b) Preference share capital.
(c)Deferred shares
Here, use of two terms “Shall be” and “and” denote this is a requirement to have both kind of
share capital but, according to further reading, company may have zero equity or preference
share capital.
Equity Share Capital
The equity shares or ordinary shares are those shares on which the dividend is
paid after the dividend on fixed rate has been paid on preference shares.
For this Section, “Equity share capital” means all share capital which is not preference share
capital. Equity share capital may be of divided into;
(i) Equity share capital With voting right; or
(ii) Equity share capital with differential rights.
This differential rights may have difference related to dividend, voting or otherwise in
accordance with rules. The term otherwise bring scope for innovation with in limit of rules. It
may be difference related to managing control, power to appoint director, or power to appoint
proxy and so on.
Characteristics
 No fixed rate of dividend
.
 Dividend is paid after dividend at a fixed rate is paid on preference shares.
 At the time of liquidation, capital on equity is paid after preference shares
have been paid back in full.
 Non redeemable.

3.  Equity shareholders have voting rights & thus, control the working of the
Company.
 Equity shareholders are the virtual owners of the Company. </
Preference Share Capital:
Preference share capital of the issued share capital of the company which carries or would
carry a preference right with respect to –
(a) Payment of dividend, either as a fixed amount or an amount calculated at a fixed rate.
Which may be either be free of or subject to income tax; and
(b) Repayment of amount of share capital or share capital deemed to be paid up, whether or
not, there is preferential right specified in the memorandum or article of the company.
This Act does not interfere in rights of preference shareholders who are entitled to
participate in the proceeds of winding up before commencement of this Act.
Kinds of Preference share
1. Cumulative or non- cumulative
2. Redeemable or irredeemable
3. Participating or non- participating
4. Convertible or non- convertible
Preference Shares:
Preference share may be classified under following categories:
i. According to Redeemability:
Under this category preference shares is classified into following two categories.
Redeemable Preference Shares:
Redeemable preference shares are those shares which are redeemed or repaid after
the expiry of a stipulated period. As per The Companies (Amendment) Act, 1988, a
company can issue redeemable preference shares which are redeemable within 10
years from the date of issue.
Irredeemable Preference Shares:
Irredeemable preference shares are those shares which are not redeemed before a
stipulated period. It does not have a specific maturity date. Such shares are
redeemed at the time of liquidation of the company. As per The Companies
(Amendment) Act, 1988, a company at present cannot issue irredeemable
preference shares.

4. ii. According to Right of Receiving Dividend:
As per this category, preference shares are classified under two heads:
a. Cumulative Preference Shares:
Preference dividend is payable if the company earns adequate profit. However,
cumulative preference shares carry additional features which allow the preference
shareholders to claim unpaid dividends of the years in which dividend could not be
paid due to insufficient profit.
b. Non-cumulative Preference Shares:
The holders of non-cumulative preference shares will get preference dividend if the
company earns sufficient profit but they do not have the right to claim unpaid
dividend which could not be paid due to insufficient profit.
iii. According to Participation:
Under this category preference shares are of two types
a. Participating Preference Shares:
Participating preference shareholders are entitled to share the surplus profit of the
company in addition to preference dividend. Surplus profit is calculated by deducting
preference dividend and equity dividend from the distributable profit. They are also
entitled to participate in the surplus assets of the company.
b. Non-participating Preference Shares:
Non-participating preference shareholders are not entitled to share surplus profit and
surplus assets like participating preference shareholders.
iv. According to Convertibility
:
According to convertibility, preference shares are of two types:
a. Convertible Preference Shares:
The holders of convertible preference shares are given an option to convert whole or
part of their holding into equity shares after a specific period of time.
b. Non-convertible Preference Shares:
The holders of non-convertible preference shares do not have the option to convert
their holding into equity shares i.e. they remain as preference share till their
redemption.
Sweat equity shares
Issue of sweat equity shares for a private company used to be regulated by Section
79A and Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003 under
Companies Act, 1956. Now the same is regulated by Section 54 and Chapter 4
under Companies Act, 2013.
“Sweat equity shares” means such equity shares, which are issued by a Company
to its directors or employees at a discount or for consideration, other than cash, for

5. providing their know-how or making available rights in the nature of intellectual
property rights or value additions, by whatever name called.
Essentials of Sweat Equity:
• Eligibility for Sweat-
a) Permanent employee of the Company who has been working in India or outside
India, for at least last 1 year
b) Director of Company-Whole time director or not
c) An employee or a director as defined in sub-clauses (a) or (b) above of a
subsidiary (in India or outside India) or of a holding Company.
• Value Addition– Has been defined. It means actual or anticipated economic
benefits derived or to be derived by Company from an expert or a professional for
providing know-how or making available rights in the nature of intellectual property
rights.
• Authorisation by shareholders– Yes, prior shareholders approval through special
resolution
• Time limit for issuing Sweat: Allotment of sweat equity shares shall be made
within 12 months from the date of passing special resolution.
• Time Gap– There should be at least 1 year between the commenced of business
and issue of such shares
.• Valuation– Valuation of sweat shares and intellectual property rights(IPR)/know
how/ value additions shall be done by Registered Valuer.
• Notice of General Meeting– Critical elements of Valuation Report shall be sent
along with the Notice. Particulars like class of shares, price, consideration, principal
terms of conditions, employees to whom sweat is proposed is required to be
mentioned in explanatory statement.
• Limit on sweat equity: In a year, sweat shares shall not exceed 15% of existing
paid up equity share capital or shares having issue value of Rs. 5,00,00,000,
whichever is higher. However, it should not exceed 25% of paid up equity capital of
Company at any time.
• Mandatory lock-in period- 3 years from the date of allotment. The fact that the
share certificates are under lock-in and the period of expiry of lock in shall be
mentioned in prominent manner on share certificate.
• Manner of treatment of sweat issued for other than cash in Books of accounts-
a) If non-cash consideration takes the form of a depreciable or amortizable asset-
Should be carried to the balance sheet according to accounting standards; or
b) In other cases- Shall be expensed as provided in the accounting standards.
• Accounting value of sweat equity –
a) If sweat equity shares are not issued for acquisition of an asset- Value shall be

6. treated as a form of compensation to the employee or the director in the financial
statements of the Company.
b) If sweat equity shares are issued for acquisition of an asset- the value of the
asset, as determined by the valuation report, shall be carried in the balance sheet as
per the Accounting Standards and such amount of the accounting value of the sweat
equity shares that is in excess of the value of the asset acquired, as per the
valuation report, shall be treated as a form of compensation to the employee or the
director in the financial statements of the company
• Rights/limitations/restrictions applicable on sweat equity shares- Shall rank pari
passu with other equity shareholders.
• Disclosure in Directors Report- Particulars like class of director or employee,
class of shares, number of sweat equity shares, percentage of sweat equity shares
in total post issued and paid up share capital, diluted Earnings Per Share,
consideration received.
• Register of Sweat Equity Shares– Details of sweat shares shall be mentioned in
this Register. Shall be maintained at Registered Office or such other place as the
Board may decide. Entries shall be authenticated by CS of the Company or by any
other person authorized by Board.
Bonus shares
Bonus shares are additional shares given to the current shareholders without any
additional cost, based upon the number of shares that a shareholder owns. These
are company’s accumulated earnings which are not given out in the form of
dividends, but are converted into free shares.
Bonus shares is a book keeping transaction (because no cash changes hands), it
capitalizes a part of reserves (retained earnings) to bring:
(1) Share capital more in line with the assets employed; and
(2) A high share price back to a more manageable amount, thus enhancing its
market ability. Although the number of shares held by each shareholder increases,
the value of the total shareholding remains the same as before the bonus issue. Also
called scrip issue, bonus shares, or capitalization issue.
The concept is similar to a rights issue, except that bonus shares are created by
transferring money from a company’s reserves into its equity capital (capitalization of
reserves). This is useful for a company that is already flush with cash and wishes to
capitalize some of its liquid assets.
Companies issue bonus shares to encourage retail participation and increase their
equity base. When price per share of a company is high, it becomes difficult for new
investors to buy shares of that particular company. Increase in the number of shares
reduces the price per share. But the overall capital remains the same even if bonus
shares are declared.

7. For example, the company may give one bonus share for every five shares held.
These are company’s accumulated earnings which are not given out in the form of
dividends, but are converted into free shares.
There was no specific section under the Companies Act, 1956 dealing with Bonus
Shares that Table A contains provision relating to capitalization of profits. Companies
were following the norms prescribed by the Controller of Capital issues. Once SEBI
came into existence and controller of Capital issues were abolished, unlisted Private
Limited Companies and Public Limited Companies were free to issue Bonus Shares
if there were sufficient reserves to match the issue of Bonus Shares.
NATURE OF SHARES OR DEBENTURES (SECTION 44):
The shares or debentures or other interest of any member in a company shall be movable
property transferable in the manner provided by the articles of the company.
NUMBERING OF SHARES (SECTION 45):
Every share in a company having a share capital shall be distinguished by its distinctive
number. This is not required for shares held by beneficial owner of shares, which are in the
record of a depository.
CERTIFICATE OF SHARES (SECTION 46):
A certificate, issued under the common seal of the company, specifying the shares held by
any person, shall be prima facie evidence of the title of the person to such shares.
Duplicate Certificate of Shares:
A duplicate certificate of shares may be issued, if such certificate —
(a) is proved to have been lost or destroyed; or
(b) has been defaced, mutilated or torn and is surrendered to the company.
Shares held in depository form:
Where a share is held in depository form, the record of the depository is the prima facie
evidence of the interest of the beneficial owner.
Caution: Duplicate Certificate:

8. If a company with intent to defraud issues a duplicate certificate of shares, the company shall
be punishable with fine which shall not be less than five times the face value of the shares
involved in the issue of the duplicate certificate but which may extend to ten times the face
value of such shares or rupees ten crores whichever is higher and every officer of the
company who is in default shall be liable for action under section 447.
Voting Rights (Section 47):
Voting rights are subject to provision of Section 43 regarding differential rights and Section
50 regarding denying voting rights on uncalled capital.
Every member of a company limited by shares and holding equity share capital therein, shall
have a right to vote on every resolution placed before the company.
This voting right on a poll shall be in proportion to member’s share in the paid-up equity
share capital of the company.
Limited Voting Rights to Preference Shareholder:
A preference shareholder shall also be a member of the company. Preference Shareholder
shall have a right to vote only on resolution
(a) which directly affect the right attached to his preference shares;
(b) resolution for winding up of the company; and
(c) resolution for repayment or reduction of its equity or preference share capital.
In these cases his voting right on a poll shall be in proportion to his share in the paid – up
preference share capital of the company.
Where the dividend in respect of a class of preference shares has not been paid for a period of
two years or more, such class of preference shareholders shall have a right to vote on all the
resolutions placed before the company.
The proportion of the voting rights of equity shareholders to the voting rights of the
preference shareholders shall be in the same proportion as the paid-up capital in respect of the
equity shares bears to the paid-up capital in respect of the preference shares.
This is explained here:
Total paid up share capital 400,
Equity share capital 300,

9. Preference share capital 100
A person holding 20 shares shall have voting right 20% under preference share capital but
5% for total capital.
VARIATION OF SHAREHOLDERS’ RIGHTS (SECTION 48):
Where share capital of the company is divided into different classes and the company want to
vary the rights attached to shares of that class this section apply. There must be a provision
with respect to such variation is contained in the memorandum or articles of the company. In
absence of any such provision in the memorandum or articles, such variation should not be
prohibited by the terms of issue of the shares of that class.
Any variation in the right attached to a particular class of share may be varied with the
written consent of holders of not less than three – fourth of the issued shares of that class.
Alternatively, this consent may be through a special resolution passed at a separate meeting
of the holders of that particular class.
Right of Dissenting shareholder:
Where, the holders of not less than 10 percent of issued shares of a class did not consent to
such variation or vote in favour of the special resolution for the variation, they may apply to
the tribunal to have the variation cancelled. Where such application is made before tribunal,
the variation shall have no effect unless and until it is confirmed by the tribunal.
Any application before tribunal under this section shall be made within twenty – one days
after the date on which the consent was given or the resolution was passed. This application
may be made by any one or more person as these shareholders may appoint in writing for this
purpose.
The decision of the tribunal shall be binding on the shareholders. Is it means, there will be no
appeal against such decision of the tribunal except a special leave petition.
The company shall within thirty days of the date of the order of the Tribunal, file a copy of
the order with the Registrar.
Caution for this Section:
Where any default is made in complying with the provisions of this section, the company
shall be punishable with fine which shall not be less than twenty-five thousand rupees but
which may extend to five lakh rupees and every officer of the company who is in default
shall be punishable with imprisonment for a term which may extend to six months or with
fine which shall not be less than twenty-five thousand rupees but which may extend to five
lakh rupees, or with both.

10. We will discuss provisions related to calls, unpaid capital, premium, discount etc. in a future
post.
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FINANCIAL TREATMENT RELATED TO SHARE CAPITAL (Companies Act, 2013)
Share capital of a company is all about financing for its operations. Company issues its share
to raise capital. On allotted shares, company may receive all money against premium and face
value of share in one go or in instalment. In present post, we will discuss; call on shares,
unpaid…
In "CorpGov"
PURCHASE OF OWN SHARES AND BUYBACK
Purchase of own shares by a company is possible but for legal restrictions. Restriction on
purchase by company or giving loan for purchase of its shares (Section 67): A company
limited by shares or a company limited by guarantee and having share capital shall have no
power to by its…
In "CorpLaw"
ALTERATION OF SHARE CAPITAL
Every business run on finance and share capital is base finance, hence life blood of a
company. PUBLICATION OF CAPITAL (SECTION 60): Where any communication or
publication of a company contains a statement of the amount of the authorise capital of the
company, it shall also contain a statement in…
In "CorpGov"

11. Difference between shareholders and debenture holders:
 A person having the debentures is called debenture holder whereas a person
holding the shares is called shareholder.
 A shareholder subscribes to the shares of a company. Shares are the parts of
share capital. On the other hand, debenture-holders are the subscribers to
debentures. Debentures are part of loan.
 A shareholder or member is the joint owner of a company; but a debenture holder
is only a creditor of the company.
 Shareholders are invited to attend the annual general meeting of the company.
Debenture holders are not invited, unless any decision affecting their interest is
taken
 Shareholders control the affairs of the company. It is managed by the Board of
Directors, the elected representatives of the shareholders. Debenture holders are
not concerned with the management and regulation of the company.
 Shareholders receive copies of the Annual Report containing the Balance Sheet,
the Profit & Loss Account and the Auditor’s Report.
 Interest on debentures is payable whether there are profits or not. But dividend on
shares is to be paid only when the company has earned profits. Interest on
debentures may be paid out of capital but dividend on shares can never be paid
out of capital.
 Rate of dividend on equity shares is not assured, whereas rate of interest on
debentures is assured.
 Shares cannot be converted into debentures whereas debentures can be
converted into shares
.
 Convertible debentures which can be converted into shares at the option of
debenture holder can be issued, while shares convertible into debentures cannot
be issued.
 Debentures are generally secured and carry a charge on the assets of the
company, whereas shares have no such charge. The debenture holder, being a
secured creditor of the company, is paid-off prior to a shareholder in the event of
winding up of a company.
 Share capital is not returned except in case of redeemable preference shares.
Debentures being loan is repaid by the company.
 Debentures can be issued at a discount, whereas shares cannot be issued at a
discount except as provided under Section 79 of the Companies Act.

12.  There can be mortgage debentures i.e. assets of the company can be mortgaged
in favor of debenture holders. But there can be no mortgage shares. Assets of the
company cannot be mortgaged in favor of shareholders.
Allocation of shares
Meaning: It means an appropriation of a certain number of shares to an applicant in
response to his application for shares. Allotment means distribution of shares among
those who have submitted written application.
Procedures regarding Allotment of Shares:
(1) Fulfillment of statutory conditions which need to be fulfilled: The company
secretary has to see that the statutory conditions regarding the allotment of shares
are fulfilled before the Board proceeds to allot the shares.
The following are the statutory conditions which need to be fulfilled:
(i) Valid offer and acceptance: There should be a valid offer and acceptance for the
allotment to be a valid one. Here the company is the offertory and the acceptors are
the general public. If there is no company to offer then there would be no public to
accept.
(ii) Unconditional Allotment: The allotment must be absolute and unconditional
and also as per the terms and conditions mentioned in the application. The allotment
should be unbiased, and not according to the caste, creed, religion. It is not that rich
shareholders pay more on the shares and the poor share holders pay less on the
shares. All have to pay the same price on the shares.
(iii) Collection of minimum subscription amount: The minimum subscription
amount as noted in the prospectus has been received within 120 days of the issue of
prospectus.
(iv) Receipt of application money: Not less than 5% of the nominal value of the
share has been secured and has been received along with the applications.
(v) Deposition of application of money in a scheduled bank: All application
money received along with the applications must be deposited in a scheduled bank.
It cannot be withdrawn until the company gets trading certificate or where such
certificate is already received or till the minimum subscription amount is received.
(vi) Filing of prospectus with the registrar: A copy of the prospectus or statement
in lieu of prospectus has been duly filed with the registrar and at least three days

13. have elapsed after such filing before the allotment is taken up.
(vii) Time of allotment: No allotment of shares can be effected until the beginning
of the fifth day from the date of issue of prospectus. The subscription list must be
opened for at least 3 days as disclosed in the prospectus.
(viii) Proper communication: The allotment must be duly communicated to the
applicant through post i.e. registered post with necessary details.
(ix) Allotment strictly as per documents issued: The Board of Directors have to
make the allotment of shares strictly as per the documents issued which include the
prospectus and the application form. The provisions made in the Memorandum of
Association and the Articles of Association must also be given due consideration.
(x) SEBI nominee: If the issue is over subscribed, the shares are allotted on a
proportionate basis. SEBI's nominee is associated while finalizing the basis of
allotment. The purpose is to see that the allotment is done on a fair and just basis.
The allotment also needs to be approved by a leading stock exchange.
(2) Appointment of allotment committee: The secretary informs the Board, that
the share applications are received and are ready for allotment. If the issue is just
subscribed or under subscribed, the Board will do the allotment of shares, but if the
issue is over subscribed, the Board appoints an allotment committee to do the
allotment work. The allotment committee will study the problem, prepare a report
and submit to the Board.
(3) Board meeting for finalization of allotment formula: A meeting of the Board
of Directors will be called to finalize the allotment formula, which is being prepared
by the allotment committee. If the shares are listed, the allotment formula is to be
finalized with the approval of the concerned Stock Exchange Authorities.
(4) SEBI's association with allotment work: A representative of SEBI need to be
associated while finalizing the allotment formula. For this, the company has to
request SEBI to nominate a public representation for allotment work. SEBI's nominee
is necessary when the issue is over subscribed.
(5) Signature of chairman on application and allotment list: The secretary has to
see that every sheet of application and allotment list is signed by the chairman. The
secretary also has to sign the application and allotment lists.
(6)Resolution of the Board for allotment: The secretary has to see that the Board
passes a resolution regarding the allotment of shares and authorizing him to issue
letters of allotment and letters of regret.

14. (7) Issue of letters of allotment and letters of regret: After the Board's resolution
to allot shares, the secretary prepares the allotment list. Then he will send allotment
letters to those who have been allotted shares and regret letters to those who could
not be allotted shares.
(8) Refund / Adjustment of application money: The secretary has to make suitable
arrangement for the repayment of application money sent by the applicant. The
refunded application money is made to those share holders who could bot be
allotted shares. The refund order is sent along with the letters of regret. If an
applicant has been allotted a smaller number of shares than the number applied for,
the secondary has to adjust the excess amount with the amount due on allotment.
(9) Collection of allotment money: The secretary has to make suitable
arrangements with the Company's Bankers for collection of allotment money against
the allotment letters.
(10) Arrangement relating to letters of renunciation: To renounce means to give
up. Certain applicants who are being allotted shares do not want them, so they
return the shares back to the company. this is known as renunciation. The blank form
of letter of renunciation and letter of request for allotment along with the letter of
renunciation duly executed and the original letter of allotment from the renounces,
the secretary has to make necessary changes in the Application of Allotment list in
order to enter the names of the new allot-tees.
(11) Arrangement relating to splitting of allotment letters: Splitting means
putting the shares in one or more names. In case any allottee requests for a split of
the allotment letter, the secretary places such a request before the Board for
approval. Once the Board approves the splitting of the allotment letter, the secretary
has to enter the details of the split in a separate list of split allotments and issue the
necessary 'split' letters.
(12) Submission of return of Allotment: Every company whether public or private
and having a share capital ans within 30 days of allotment is required to send to the
Registrar, a document known as the "Return of Allotment". The return of allotment
contains various details on allotment of shares such as the nominal value of shares
allotted, names and addresses of allotees, amount paid or payable on each share and
particulars of bonus shares and shares issued at discount. The secretary has to see
that these documents are prepared and submitted in time to the Registrar.
(13) Preparation of Register of members and issue of share certificates: The
secretary has to prepare the Register of members from the Application and
Allotment lists. He has to see that the shares certificates are properly printed, sealed,

15. signed and distributed to all the allot-tees within three months after the allotment of
shares. He has also to see that the share certificates are issued against the letters of
allotment.
Transfer of shares
Transfer of shares is a voluntary act of members and it is the method of
transferring the ownership rights of the shares from one person to another.
Free Transferability of Securities of Public Companies
With a view to ensuring the free transferability of the securities of all the public
companies, the Depositories Act, 1996 inserted a new Section, namely, Section
111A in the Companies Act. This Section, as amended by the Depositories
Related Laws (Amendment) Act, 1997, provides as follows:
1. The shares and debentures of a public company, whether listed or not, shall be
freely transferable.
2. The Board of Directors of the company or the concerned 'depository' does not
have discretion to refuse or withhold transfer of any security.
3. The transfer has to be effected by the company immediately as soon as it
receives instrument of transfer, if the securities are outside the depository mode.
4. When securities are in the depository mode the transfer shall be effected by the
depository automatically on the receipt of the intimation in appropriate form from
the 'participants'.
5. Under both the cases, namely, non-depository mode or depository mode, the
transferee shall be entitled to all the rights including voting rights associated with
the security as soon as intimation about the transaction is received by the
company or depository.
However, if it is felt that any transfer of securities is in contravention of any of the
provisions of the Securities and Exchange Board of India Act, 1992, or regulations
made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985,
or any other law for the time being in force, the company, 'depository', 'participant',
investor, or SEBI can, within 2 months from the date of transfer in the depository
or from the date on which the instrument of transfer or the intimidation of
transmission was delivered to the company, move an application to the Company
Law Board (CLB) to determine if the alleged contravention has taken place.
After enquiry if the CLB is satisfied of the contravention, it can direct the
company/depository to make rectification in the ownership records.
Pending the completion of enquiry, the CLB can suspend the voting rights in
respect of securities so transferred. However, the transferee in such cases will
enjoy the economic rights attached to the security, as also the right to further

16. transfer the security to another person.
Even if the transfer of securities is in contravention of any law, the transfer is the
be effected subject to subsequent rectification by the direction of CLB.
Restrictions on Transfer
The right of transfer must necessarily be restricted by the Articles, the case of a
private company or deemed public company because of the legal requirement to that
effect. Any type of restrictions may be there in an effort to maintain personal contact
among members. One of the common restrictions is the pre-emption clause which
states that the intending transferor must first offer the shares to the existing
members of the company, so long as the member can be found to purchase them at
a fair price.
Absolute restriction on the right of transfer, contained in the Articles, shall be ultra-
virus the Act. Usually the Articles empower the directors to reject transfer of shares
on the following grounds:
(a) where partly paid up shares are to be transferred to a pauper or a minor;
(b) where the transferee is person of unsound mind;
(c) where a call is unpaid against the shares to be transferred;
(d) where the company has a lien on the shares because the transferor is indebted
to it;
(e) where there is a personal animosity between the directors and the proposed
transferee or the transferee would harass the management;
(f) where the instrument of transfer contains some apparent irregularity, e.g., not
signed or stamped properly.
The power to refuse registration of transfer is available only to a private company
[New sub-section (14) inserted in Section 111 by the Depositories Act, 1996].
The directors are bound to state the grounds on which they refuse registration of
transfer. Moreover, a formal active exercise of the power to refuse is required; mere
failure, due to deadlock or something, to pass a resolution is not a formal active
exercise of the right to decline, and therefore, the applicant will be entitled to be
registered as a member of the company.
Notice of the refusal must state the reasons for such refusal and must be sent to
both the transferor and the transferee within 2 months after the instrument of transfer
was lodged with the company [Sec. 111 (2)]. So long as the directors act within the
scope of the articles, their decision cannot be challenged except on the ground of
bad faith.

17. Where it is proved that they have not exercised their power of refusal in good faith
for the benefit of the company, the court may set aside the decision of the directors
and order for the registration of the transferee's name as a member of the company.
In addition, the transferee will also be entitled to damages which will be equal to the
fall in the market price of shares between the date of refusal and the date of the
court's decision.
Right of Appeal
As per Section 111, as amended by the Depositories Act, 1996, if a private company
refuses, on any ground not stated in the restrictions contained in its Articles of
Association, to register the transfer of any shares, the transferor or transferee may
prefer an appeal to the CLB against the refusal.
The appeal must be filed within 2 months of the receipt of the notice of such refusal
or, where no notice has been sent by the company, within 4 months from the date on
which the instrument of transfer was delivered to the company.
The appeal shall be made be a petition in writing and shall be accompanied by the
prescribed fee.
After receiving the petition, the CLB shall issue notices to the company, the
transferor and the transferee in order to provide them an opportunity to make their
representations.
On the consideration of the whole case, if the refusal does not seem justified, the
CLB will issue an order to the company to register the transfer, which must be given
effect to, within 10 days of the receipt of the order.
The CLB may also make such consequential orders regarding payment of dividend
or the allotment of bonus or right shares as it thinks fit and just.
If default is made in giving effect to the orders of the CLB, fines and penalties are to
be imposed on the company and on every defaulting officer upto Rs. 10,000 with a
further fine extending to Rs. 1,000 for every day during which the default continues.
The Right of Appeal is not available in the case of a private company.
The provisions of Section 111 apply to transfer of debentures as also to transmission
of shares and debentures.
Position of Transferee, if his Appeal Fails

18. The ordinary result of a refusal to register a transfer of shares is that the transferor
will be the trustee for the transferee, in respect of the rights relating to the shares or
if the transferee so chooses he may sue the transferor for return of the consideration
for the transfer under Section 65 of the Indian Contract Act.
Where a transfer of shares is refused the transferor continues to be the legal owner
thereof so far as the company is concerned.
Restrictions upon Acquisition or Transfer of Shares in Certain Cases
Section 108A to 108I deal with restrictions on the acquisition or transfer of shares in
certain cases with a view to preventing or regulating transfer of shares so as to
ensure that by such transfer of shares, management does not pass into the hands of
undesirable persons, thereby adversely affecting the interests of non-controlling
shareholders and public financial institutions.
Applicability
It is applicable to the acquisition of transfer of shares by, or to, an individual, firm,
group, constituent of group, body corporate or bodies corporate under the sane
management who or which -
(a) is the owner in relation to a dominant undertaking, or
(b) would be, as a result of such acquisition or transfer, the owner of a dominant
undertaking.
Exemptions
The restrictions contained in Section 108A (except sub-section 2 thereof) shall not
apply to the transfer of any shares to, and the restrictions contained in Sections
108B to 108D shall not apply to the transfer of any shares by -
(a) Any Government company;
(b) Any corporation established by or under any Central Act, and
(c) Any financial institution.
Restrictions
1. Restriction on the acquisition of shares.
2. Restrictions on transfer of shares.
3. Restriction on the transfer of shares of foreign companies.
4. Power of Central Government to direct companies not to give effect to the
transfer.
Procedure for the Transfer of Shares
When a share warrant to bearer has been issued, no procedure for transfer of such
shares is to be followed.
In the case of registered shares for which a share certificate has been issued, certain

19. legal requirements have to be complied with,
Share can be transferred by a person, whose name appears in the Register of
Members; but a legal representative of a deceased member, can also transfer
shares.
Oral transfers are not recognised by the Act.
Transfers made during winding up are void unless sanctioned by the Liquidator (in
case of voluntary winding up) or by the Court (in other types of winding up).
In addition to complying with the provisions of the Articles relating to transfer of
shares the following procedure must be followed:
1. An instrument of transfer should be executed in the 'form' prescribed by the
Government, and before it is signed by the transferor and before any entry is made
in it, it should be presented to the prescribed authority, who will stamp the date of
presentation thereon.
2. The instrument of transfer must be duly filled and signed by the transferor and the
transferee. It must also be duly dated and stamped and the relative share certificate
must be attached to it. If no such certificate has yet been issued, the letter of
allotment must be attached to the transfer form.
3. The completed transfer form along with the registration fee, if any, should be
delivered at the company's head office, for registration, either by the transferor or the
transferee,
(a) In case of quoted shares on the stock exchange, before the first closure of the
register of members after the stamped date, or within 12 months from the date of
such presentation, whichever is later;
(b) In the case of unlisted shares, within 2 months from the date of presentation to
the prescribed authority.
The Central Government may extend these time periods on application to avoid
hardship. The application should be made to the Regional Director of the CLB by the
purchaser or his broker. These time limits have been prescribed to do away with the
evil of Blank Transfers.
4. Next, in case the application is made by the transferor and relates to partly paid-
up shares, the company must give notice of the application to the transferee and
register the transfer only if the transferee makes no objection to transfer within 2
weeks from the receipt of the notice.
No response from transferee shall be presumed his consent for registration. No such
consent need be given where the application for registration of transfer is made by
the transferee himself, but in order to be sure that the instrument of transfer is
genuine, a notice should be sent to the transferor, informing him about the
lodgement of the instrument of transfer and stating that if no objection is raised within
the specified time, the company will proceed to register the transfer.

20. 5. If no objection is received either from the transferor or transferee within the
specified time, then the work of registration of transfer is taken up. Now the secretary
enters the details of the transfer in the Register of Transfers.
6. The secretary then convenes a meeting of the Board of Directors and places
before it the Instruments of Transfer along with the share certificates and the
Register of Transfers for their approval. If satisfied, the Board passes a resolution
approving the transfer(s).
7. After all the steps have been duly complied with, the company registers the
transfer by striking off the transferor's name from the Register of Members and
entering the name of the transferee in its place. An endorsement is made on the
back of the share certificate, recognising the transferee as the new holder for it and
the same is issued to the transferee within 2 months of the date of lodgement of the
transfer. A listed company is, required to issue Certificates within 1 month.
The procedural requirements associated with transfer, shall not apply to the transfer
effected by the transferor and transferee who have availed the services of
'depository' since there is no need of executing a transfer deed.
Secretarial Duties For Transfer Of Shares
1. The secretary has to ascertain that there is adequate provision regarding transfer
of shares in the Articles Of Association of the company.
2. On receipt of proper instrument of transfer, called the 'Transfer Deed' duly
stamped and executed by the transferor and the transferee together with the transfer
fee, if payable, he has to see that it is accompanied by a share certificate in the
name of the transferor or the transfer should be a 'certified' one and that it is
submitted within the prescribed limit as required under Section 108.
3. It is the responsibility thereafter to scrutinise the instrument of transfer and the
relevant share certificate, giving particular attention to the following points:
(a) The signature of the transferor must tally with the specimen signature as
recorded with the company, if the transferor is the registered holder of the shares;
otherwise the signature should be verified from the previous Transfer Deed where
the present transferor is the owner of shares earlier transferred to him by the
registered shareholder. If the transfer has been executed by an attorney, the
registration of the power of attorney should be verified. If transferor is a company,
the transfer should be executed under the common seal.
(b) The details of the transferee have been correctly completed.
(c) The signature and address of the witness are in order.
(d) The stamp of the delivering broker and the lodging agent (if this is not the same

21. as the delivering broker).
(e) Any alteration in the 'Transfer Deed' is properly initialled by both the transferor
and transferee.
(f) The distinctive numbers of shares both in the Instrument of Transfer and the
Share Certificate agree.
g) The consideration for the transfer as shown in the 'Transfer Deed' is reasonable
.(h) Share transfer stamps have been affixed on the Transfer Deed at the rate 50
paise for every Rs. 100 or part thereof calculated on the amount of consideration.
(i) The fact that there is no restraint on transfer or that no duplicate share certificate
has been issued must be checked from the Register of Members.
4. If the transferee is a company incorporated under the Companies Act, the
secretary must confirm that the company is authorised to acquire shares by its
Memorandum and Articles of Association.
5. In the case of transfer of shares of Indian companies by persons resident outside
India, or by foreign nationals, to other persons whether resident in India or outside
India, and in the case of transfer of shares to any person, whether Indian or
foreigner, whether resident or non-resident, the secretary should also see that the
necessary approval of the Exchange Control Department, Reserve Bank of India,
under the Foreign Exchange Management Act, 1999, has already been obtained by
the transferor or transferee before effecting any transfer or sale of shares.
6. If everything is well after the scrutiny of 'Transfer Deed' etc., the secretary should
issue 'Notices of Lodgement of Transfer' to the transferee and transferor and wait for
atleast a fortnight to see whether any objections are received from them.
7. If no objection is received, all transfers must then be recorded in the Transfer
Register.
8. The secretary should convene a Board meeting to pass the necessary resolution
for the registration of transfers.
9. After the resolution is passed, the secretary must see that the name of the
transferee is recorded in the Register of Members and the name of the transferor is
removed therefrom. Necessary endorsement is made on the back of the share
certificate(s) and the same is issued to the transferee.
Certification of Transfer
When a company certifies on the instrument of transfer that the relative share
certificate of the shares proposed to be transferred, has been lodged with it, it is

22. called 'certificate of transfer.' Certification of transfer is necessary when there is a
part disposal of shares or there are multiple purchasers.
The company issues only 1 share certificate for the whole lot of shares standing in
the name of 1 person.
For a valid transfer, relevant share certificate must be attached to the instrument of
transfer.
In view of these facts, there a arises a problem in case the shareholder wants to sell
only a part of his shareholding or there are 2 more buyers.
There are 2 alternatives open to such a transferor to solve this problem
(a) He may request the company to cancel the original certificate and in
exchange to issue the new split certificates of desired denomination.
(b) He may send his share certificate, together with the instruments of transfer, to
the company for certification purposes.
The company usually takes time in issuing 'split certificates' which causes
inconvenience to both the transferor and transferee and therefore, in practice,
generally, 'certification of transfer' is considered desirab.
On all stock exchanges, 'certified transfer' is recognised as equivalent to a
'transfer form' plus the relative share certificate.
Such certification would not in any way guarantee the title of the transferor,
but the company shall be responsible to the third party, acting bona fide on
the certification of transfer, for damages, if it was issued by the company
negligently or fraudulently.
Under Section 112(3)
(a) An instrument of transfer shall be deemed to be certified if it bears the words
'Certificate Lodged' or words to that effect.
(b) The certification of an instrument of transfer shall be deemed to be made by a
company, if –
(i) the person issuing the certificated instrument is a person authorised to issue such
instruments of transfer on the company's behalf; and
(ii) the certification is signed by any officer or servant of the company or any other
person authorised to certificate transfers on the company's behalf, or if a body
corporate has been authorised, by any officer or servant of that body corporate
.

23. (c) A certification shall be deemed to be signed by the person whose signature
appears on the instrument unless it is shown that the signature was placed there
neither by himself nor by any other person authorised to use the signature for the
purpose of certificating transfers on behalf of the company.
Procedure
1. For certification of transfer, the transferor executes the instrument of transfer and
presents it along with the relevant share certificate to the company.
2. After a preliminary scrutiny, the secretary stamps the instrument of transfer with a
rubber Certification Stamp in the left hand corner, and puts his signature.
3. At the same time he cancels the original share certificate by affixing a rubber
stamp bearing the word, 'Cancelled' on the face of it and makes a note of the
relevant facts, namely, date of certification, name of transferee, number of shares
transferred, etc., on the back of the cancelled share certificate.These particulars of
the certified transfer are also entered in a 'Register of Certified Transfers'
.
5. After certification of transfer, the secretary sends the Certified Transfer Form(s)
and a Balance Ticket (for the balance of shares not to be transferred) to the
transferor.
6. In case the shareholder disposes of the whole of his holdings to two or more
transferees, no 'Balance Ticket' is issued.
7. The transferor retains the 'Balance Ticket' and forwards the 'Certified Transfer
Form' to the transferee, who then signs it and delivers the same to the company's
registered office for registration.
8. In the due course, after observing the necessary formalities as mentioned earlier,
the secretary's office will prepare 2 share certificates which will be issued to the
transferor and the transferee.
Splitting of Joint Holdings of Shares
If the joint shareholders want splitting of their joint holding of shares and registering
them in their individual names, they have to follow the procedure prescribed for
transfer of shares.
An instrument of transfer properly stamped and completed is necessary for
registering the transfer in each case, as converting a joint holding into a separate
holding is essentially a transfer from joint ownership into individual ownership.
The instrument of transfer will have to be executed by all the joint holders as
transferors and by the individual in whose name the shares are to be registered as
the transferee.

24. Effect of Transfer Before its Registration
As regards the rights and the liabilities of the transferor of shares, Lindley, L.J.,
observed "when a member transfers his shares, he transfers all his rights and
obligations as a shareholder as from date of the transfer. He does not transfer the
dividends already announced nor does he transfer his liability in respect to the calls
already made; but he transfers his rights to future payments and in respect of future
calls."
But with concern to the company, transfer does not take effect unless it is registered
during the period when transfer exists and if registration is not done, the transferee is
liable to indemnify the transferor against future calls paid by him in respect to the
shares and the transferor must pay any dividend to the transferee he may have
received. The party can modify this by agreeing to transfer the shares "cum" (with)
dividend or "ex" (without) dividend.
The provisions of Section 27 of the Securities Contracts (Regulation) Act, 1956
states that it shall be lawful for the person whose name appears in the books of the
company as the holder of the securities to receive any dividend declared by the
company in respect thereof for any year, even if the transfer of shares has already
taken place, unless the transferee who claims the dividend from the transferor, has
lodged the security & all other documents relating to the transfer with the company
for registered within 15 days of the due date of the dividend.
Right To Dividend to be held in abeyance pending Registration of Transfer of
Shares
With a view to protect the investors a new Section 206A has been inserted in the
Companies (Amendment) Act, 1988. This new Section provides that in case of share
transfers pending registration, the dividend accruing on such shares shall be
transferred to the "Unpaid Dividend Account" (referred in Section 205A) unless the
transferor authorises the company in writing to pay the same to the transferee
specified in such instrument of transfer. The company shall also keep in abeyance in
relation to such shares the offer of "right shares" and issue of fully paid bonus shares
until the transfer is registered.
Blank Transfer
When the instrument of transfer duly signed and completed by the transferor, but
leaving the name and signature of the transferee blank, is delivered to the transferee
along with the relevant share certificate, it is called a "blank transfer."
In order to curb the abuse inherent in the system of blank transfers, Section 108 (1-
A) of the Amending Act, 1965, has the following procedure for transfer of shares with
respect to restrict the period of currency of blank transfers:

25. 1. Every instrument should be in the prescribed form and is to be presented to the
Registrar of Companies before it is signed by the transferor or any entry is made
therein, who will stamp thereon the date of presentation.
2. The instrument so stamped, after it is completed in all other respects by the
transferor and transferee, be delivered to the company for registration within the
period stated below:
(a) In the case of shares dealt in or quoted on a recognised stock exchange, at any
time before the first closure of the Register of Members after the stamped date, or
within 12 months from the date of such presentation, whichever is later; and
(b) In the case of unlisted shares, within 2 months from the date of presentation to
the prescribed authority.
Exceptions
The restriction of the time limits given in the previous slide does not apply to the
transfer of following shares [Sec. 108(1-C) & (1-D)]:
1. Any shares: (i) which are held by a company in the name of a director or nominee
in pursuance of Section 49(2) & (3), or (ii) which are held by a corporation, owned
and controlled by the Government, in the name of a director or nominee, if the
following conditions are fulfilled:
(a) The company or corporation, as the case may be, stamps on the form of transfer
in respect of such shares, the date on which it decides that such shares shall not be
held in the name of the director or nominee; and
(b) The instrument of transfer, duly completed in all respects, is delivered to the
company concerned for registration within 2 months of the date so stamped.
2. Any shares deposited by any person with (i) State Bank Of India, or (ii) any
scheduled bank, or (iii) any other banking company or financial institution, or (iv) the
Government or a corporation owned and controlled by the Government, by way of
security for the repayment of any loan or advance to, or for the performance of any
obligation undertaken by, such person, if the following conditions are fulfilled:
(a) The depositee stamps on the form of transfer of such shares (i) the date on which

26. such shares are returned by it to the depositor, or (ii) in the case of default on the
part of the depositor, the date on which such shares are released for sale, o
r (iii) where the depositee intends to get such shares registered in its own name, the
date on which the instrument of transfer relating to such shares is executed by it; and
(b) The instrument in such form, duly completed in all respects, is delivered to the
company for registration within 2 months of the date so stamped.
3. Any shares which are held by the Central or State Government in the name of its
nominee, except that every instrument of transfer in respect of any such shares shall
be in the prescribed form.
The Central government may on application extend the periods mentioned above by
such further time as it may deem fit.
It must be noted that the blank transfers are not negotiable instrument, and
therefore, a bona fide purchaser of shares from a person who is in possession of
them by fraud, does not acquire a good title to them.
Forged Transfer
When a instrument of transfer bears a forged signature of the rightful owner, it is
called a 'forged transfer'. It is null and void even if it is registered by the company.
But if in the meantime, that share certificate is transferred subsequently to another
person, who acquires the shares in good faith, for value and under a genuine
transfer, by the first transferee, and the company registers this and issues a new
certificate to him, the company is stopped from denying the title, since the share
certificate is prima facie evidence of the title.
Company's action on the fraud
The company is in two minds now since on one hand the company on discovery of
the fraud has to restore the name of the true owner and on the other it has to
compensate the subsequent transferee, who was acting on genuine transfer. The
damages will be the market value of that shares at that time. The company can claim
the indemnity from the defrauded transferee. Any person claiming damages must
prove that he sustained losses by acting on faith of a share certificate issued by the
company.
Depository system

27. In order to do away with theft, mismatch of signature, huge paperwork and other
irregularities, the Government of India enacted the Depositories Act, 1996 to provide
for legal framework to set up depositories to record the ownership details of
securities and effecting the transfer of securities through book entry only. In this
system transfer does not take place physically but by mere book entry in the ledgers
of the Depository.
This Act states that the agents of each depository will be called as 'participants' who
will be a link between the investors and the depository. An investor will have to enter
into an agreement with the depository through a participant and surrender his shares
to the company concerned.
The company cancels the name of the investor and enters the name of the
depository and informs the depository and on receiving this information the
depository enters the name of investor as beneficial owner and so the investor
enjoys all the rights and is subject to all the liability. For transfer the investor will
intimate the participant who in turn informs the depository. The depository thus
deletes the name of the investor and records the name of transferee. With regard to
the transfer under depository system Section 108 of the Companies Act are
dispensed with.
Features
1. Partial dematerialization of securities. The investor can go in for complete or
partial dematerialization i.e. he can have a part of his securities under the depository
system and the remaining part will be in the physical form.
2. Securities will be fungible. Sections 83 ,150 and 152 of the Companies Act have
been amended to make the securities fungible. Now the securities held with a
depository will have no distinctive identifiable numbers and all the certificates of the
same security will become interchangeable.
3. It would become freely transferable. The securities issued by a public
company(other than a deemed public company) have been made freely transferable
under the Depositories Act. This Act has deleted Section 22A of the Securities
Contracts (Regulation) Act, 1956 and by inserting Section 111A in the Companies
Act.
4. No stamp duty. Within the depository system there is no stamp duty on transfer of
shares but outside the depository there is.
It is claimed that this system will enhance the efficiency and also provide huge
benefits to the investors as well.

28. Transmission
Transmission of shares is the result of operation of Law and it takes place only on
the death, insolvency or lunacy of the share holder.
Transfer Vs Transmission
Procedure For Transmission
There are two alternatives open to the legal representative. Either he may get
himself registered as the member or he may transfer the shares to some other
person.
If he chooses the first option then the company will check the genuineness of the
share certificates and the succession certificate and if satisfied the company will
delete the name of the deceased member and include the name of the legal
representative and issue fresh certificates to him.
If he chooses option two, he can follow the usual process for transfer of shares but
he has to attach one more document with it i.e., the succession certificate. If the
company refuses to register the transmission then the 'Right of Appeal' to the
Company Law Board is available to the legal representative.
Secretarial Duties in Connection with the Transmission of Shares
The secretarial duties in connection with transmission are
:
Transfer Transmission
By a deliberate act. 1. By the operation of law.
Requires the execution of formal
instrument of transfer
2. Requires an evidence showing the
legal entitlement.
. There must be adequate consideration
.
3. There is no question of consideration.
Stamp duty is payable. 4. Stamp duty is not payable.

29. 1. The secretary has to check up that the 'Letter of Request' is a proper one. Letter
of Request is the request of legal representative to register his name in place of the
deceased subject to the conditions on which the deceased held the shares.
2. He has to ensure that satisfactory proof of title has been attached to the Letter of
Request. He should also see the 'Letter of Probate' if the member had died testate,
i.e., leaving a 'will,' or the 'Letter of Administration' if the member has died intestate.
In case of bankruptcy, his estate is vested to the Assignee appointed by the Court
and in case of lunacy, his estate is vested to the Administrator appointed by the
Court. The secretary must check that the Administrator has produced the
documentary proof of their appointment from a competent Court
.
3. If the legal representative has to transfer the shares, he must attach any 'Probate',
'Succession Certificate' or 'Letter of Administration' with the 'instrument of transfer.'
On receipt of proper 'instrument of transfer' the duties of a secretary are as same as
while in transfer of shares.
4. Finally, the secretary should convene a Board meeting to pass the resolution and
thereafter he should introduce necessary alteration in share certificates and Register
of Members. He should enter the details of the Probate, Letters of Administration,
Succession Certificates in the Register of Probates.
Transfer and Transmission of Debentures
All the provision of transfer and transmission of shares are same to debentures. But
the difference are:
1. The transfer deed is not required to be presented to the prescribed authority for
stamping and even if it is presented, it does not become out of date as in case of
shares.
2. The stamp duty is calculated on the face value of the debentures and not on the
amount of consideration.
Nomination of Shares and Debentures
The Companies (Amendment) Act, 1999 introduced nomination facility by inserting a
new sub section (11) in Section 58A and two new Sections 109A and 109B which
provides:
1. The member nominates a person to whom his shares and debentures are given in
the event of the death of the member.
2. The joint holders of the shares nominates a person to whom their shares and

30. debentures are given in the event of the death of all the members.
3. Such nomination will supersede any 'will' or disposition, whether testamentary or
otherwise.
4. It can be cancelled or varied by the security holder at any time.
5. Where the nominee is a minor, the security holder nominates another person who
takes care of the shares till the nominee attains majority in the event of the death of
security holder during the minority of the nominee.
Procedure for Nomination
The security holder has to make nomination in Form 2B prescribed by Rule 5D of the
Companies (Central Government's) General Rules And Forms, (Fourth Amendment)
Rules, 2000 which states:
1. Nomination can be done only by single holder or joint holder and not by any
corporate body.
2. If held jointly, all the joint holders have to sign the nomination form.
3. Nomination should be made in favour of individuals only.
4. Minor can be nominated, but during minority of the nominee, all the rights are
exercised by the guardian.
5. Nomination stands rescinded upon transfer of shares or debentures.
6. The Nomination Form is filled in duplicate with the Company or Registrar & Share
Transfer Agents of the Company who will return one copy to the shareholder.
7. No fee is payable to the company.
The rights of nominee after transmission are similar to the rights of legal
representative after transmission.

31. Right of Nominee after Transmission of shares and debentures
On the death of the security holder, who has availed the facility of nomination, the
transmission of shares and debentures to the nominee takes place. The rights of the
nominee after transmission are governed by the provisions of Section 109B which
are as follows:
1. The nominee may either get himself registered as the security holder or may
transfer the securities to some other person. If he does not opt for any of these
options the Board of Directors send a notice asking for a decision. If he does not
comply within 90 days of the notice, the company may withhold the payment of
dividend, bonus or any other moneys payable, until the requirements have been
complied with.
2. In case the nominee elects to be registered as the security holder himself, he will
send a notice in writing for the same to the company along with the relevant
share/debenture & the death certificate
.
3. In case the nominee opts to transfer the shares/debentures, he will have to follow
the usual procedure of transfer of shares/debentures, but along with the death
certificate.

32. Acknowledgement
I would like to express my sincere gratitude to rajni parmar madam for her virtual support,
guidance and encouragement without which this project would not have come forth.I would
also like to express my gratitude to the staff of the Department for their support during the
making of the project.
I am also thankful to all those who helped me directly or indirectly in the preparation of the
same.

33. Bibliography
 www.google .com
 www.wikepedia .com
 securities and compliances book by sangeet khedia.
 www.icsi.edu
 mca.gov.in/ministry v2
 www.lexinexis.in
I

34. Index
 Meaning of shares
 Kinds of shares
 Difference between rights of shareholder and debentureholder
 Allocation of shares
 Transfer of shares
 Transmission of shares
 Difference between transfer and transmission of shares