Recovery of Shares

How to Apply for a Duplicate Share Certificate in India?

Losing a Share Certificate can be a horrible experience for any shareholder, as it proves that the shareholder owns shares in the company.  Lost, misplaced, or abused are all reasons that can lead to no original certificate, thus causing chaos. Thankfully, the good news is that there is a straightforward method in India to apply for a duplicate share certificate.  

As of now, physical share certificates have been replaced by a Demat Account, which has made things easier by holding the shares electronically. Demat Account eliminates various reasons for issuing a Duplicate Share Certificate.  Thus, it is recommended to convert your physical share certificate into a Demat if not done yet.  

If you have lost your original share certificate and want to apply for a Duplicate Share certificate, you are on the right page. This article will guide you on what needs to be done and what paperwork or requirements you need to go through, making it easy to obtain your lost share certificate, resume ownership, and avoid any financial losses.      

What is a Share Certificate?

An official document issued by a company to verify the possession of a specific quantity of shares in that particular company. A share certificate serves as proof that you are a shareholder of that stock. It states the name of the company, your name as the holder, the amount of stock you hold, and the consideration you paid for the stocks.

This document also carries the company identification number (CIN) and registered address and may bear the seal of the company or the signature of an authorized person. While physical share certificates were once common, many people now use Demat accounts to hold their shares digitally. In case the share certificates are lost, damaged, or destroyed, the company may issue a duplicate share certificate to allow the real owner to exercise rights such as voting rights in a meeting or the right to dividends.

What is a Duplicate Share Certificate?

The issuance of a Duplicate Share Certificate is allowed under The Companies Act, 2013 and Section 46 and Rule 6(2)(a) to (c) of the Companies (Share Capital and Debentures) Rules, 2014.

A duplicate share certificate is a replacement certificate of an original Share Certificate issued by a company when the original certificate has been destroyed, damaged, or lost in any way. It is a certificate that serves as proof of ownership for shares of that company, similar to the original certificate.

A duplicate certificate may be issued to the shareholder if the original stock certificate is lost (or becomes illegible) upon application and proper proof of such loss or damage. Such actions protect the shareholder’s rights and guard against loss of financial stature or recognition of ownership because of such a loss.

 The duplicate certificate has the same force and effect as the original and thus allows a shareholder to manage shares without making the record of ownership difficult.

Reasons For the Need of Duplicate Share Certificates

Following are the situations where you need to issue a Duplicate Share Certificate:

Lost/Misplaced: Losing or misplacing a share certificate is the most common reason people apply for a Duplicate Share Certificate.

Damage: When the certificate gets damaged or unreadable, a replacement share certificate is required.

Theft: If in case your share certificate gets stolen, you are required to apply for a duplicate share certificate.

Name Change: Circumstances like marriage, divorce, or any other reasons make changes in your name. If so, you need to apply for a duplicate share certificate with the new details.

What can you do when you lose a Share Certificate?

In the event one loses their share certificate, there are certain corrective measures that one can take to ensure everything goes on smoothly. Begin by communicating the loss to the company. You can do this either in writing or by sending a letter containing your name and address, the folio number, and, if possible, the share certificate number. 

The company freezes share transfers for a minimum of 30 days from the date it acknowledges the first report. It is to assure the company that no one will transfer the shares fraudulently during that stipulated time. Upon the expiration of the 30 days, depending on the level of confidence established, you will be asked to provide proof of identification to the satisfaction of the company’s management, and directions will be furnished regarding the obtaining of the double.

It will be good to have a police report standard since some companies will insist on one before going ahead with issuing a duplicate. Once completed, the company will issue you with a duplicate share certificate, confirming your ownership. 

Documents Required to Issue a Duplicate Share Certificate

To issue a Duplicate Share Certificate, you need to submit the following documents:

• Formal Application to the Company stating the loss or damage of the original Share Certificate
• FIR including the Name of the shareholder, Folio Number, Share Certificate Number, Distinctive members of the Share, and a statement about the loss or damage of the Share Certificate.
• Signed Indemnity Bond on non-judicial stamp paper
• Affidavit on non-judicial stamp paper attested by a Special Executive Magistrate or a Notary Public
• Proof of Identity
• Published advertisement in a newspaper mentioning the name of the shareholder or details of the share certificate.
• Proof of Ownership
• Original Share Certificate (if damaged, not lost)
• Additional Documents if required

Procedure to issue a Duplicate Share Certificate

To apply for a Duplicate Share Certificate, follow the given steps:  

Inform the Company: You are required to inform the company about the loss or destruction of your share certificate. Ensure to provide particulars like your name, address, folio number, and the share certificate number.

File a Police Report: You need to inform the police of the loss of the share certificate through the prescribed FIR, giving them all necessary details relating to the loss.

Prepare Your Documents: Documents to be prepared include an indemnity bond, a notary affidavit, and an FIR (police report). 

Submit Your Application: A formal application for a duplicate share certificate to the company must be submitted along with the required documents. Some companies allow such requests to be made online on their websites.

Shares Frozen: The company will freeze your shares for 30 days or as deemed necessary to prevent any illegal transfer until the investigation is concluded.

Approval by the Board: The request will be placed before the company’s Board of Directors. They will decide:

• A nominal fee for the issue of the duplicate share certificate (not exceeding Rs. 50).
• The actual out-of-pocket expenses incurred by the shareholder during the investigation.

Issue of Duplicate Certificate: Once the Board approves your request, the duplicate certificate will be issued.

The Duplicate Will be Registered: After the duplicate certificate is issued, the company will record it in a special register called the ‘Register of Renewed and Duplicate Share Certificates’ (Form SH-2).

The Information on Duplicate Certificate: The duplicate certificate issued will clearly show that it is issued as a replacement for the original certificate. The letters “Duplicate issued instead of Share Certificate No…” and the word “Duplicate” are stamped.

Get Your Duplicate Certificate: You will then receive your duplicate certificate in the post or in person.  

To Remember:

The ‘Register of Renewed and Duplicate Share Certificates’ must be kept at the company’s registered office or by an authorized person (like the company secretary).

The company will include the word ‘Duplicate’ on the certificate to make it clear that it’s a replacement.

Time to Acquire a Duplicate Share Certificate

Given below is the timeline to secure a duplicate share certificate-

Listed Companies: The duplicate certificate will be issued within 45 days after submitting the necessary documents.

Unlisted Companies: The duplicate certificate will be issued within three months.

Conclusion

To get a duplicate share certificate in India, you need to follow specific steps. If your certificate is lost, damaged, or stolen, the company allows you to apply for a duplicate. You must submit certain documents, like a police report, an indemnity bond, and proof of ownership if needed.  After you apply, the company will freeze the share transfers for a certain time. The board will review your case, approve the new certificate, and issue it to you.

Although the process usually runs smoothly, it can take time. For listed companies, it typically takes about 45 days, while for unlisted companies, it might take up to 3 months.  To avoid these issues in the future, it is a good idea to convert physical shares into a Demat account.

To get expert assistance in the issuance of duplicate share certificates in India, visit https://enterslice.com/.

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