{"id":3514,"date":"2017-08-19T12:25:04","date_gmt":"2017-08-19T06:55:04","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=3514"},"modified":"2022-09-06T16:00:29","modified_gmt":"2022-09-06T10:30:29","slug":"time-limits-allotment-issue-share-certificates","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/time-limits-allotment-issue-share-certificates\/","title":{"rendered":"Time Limits for Allotment and Issue of Share Certificates"},"content":{"rendered":"<p class=\"has-drop-cap\">On-time <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Allotment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An allotment is the systematic distribution of business resources, often pertaining to the distribution of shares during initial public offerings (IPOs) to underwriting firms or to new and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/allotment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>allotment<\/a> of shares is a mandatory function of the Company and also, as per Companies Act, Share certificate should be issued within the statutory time frame. In this article we shall discuss about the issuance of Share Certificates.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are Share Certificates?<\/h2>\n\n\n\n<p>Share certificate is a document that is issued by a company evidencing that a person named in that certificate is the owner of the company&rsquo;s shares. As per Companies Act, companies are required to issue share certificate post their incorporation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Time limit for issuing share certificates<\/h2>\n\n\n\n<p>The time limit for Allotment of shares means the appropriation of a certain number of shares to an applicant in response to his application for shares, i.e., the distribution of shares among those who have submitted a written application on a predetermined <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>.<\/p>\n\n\n\n<p>The company should issue the <a href=\"https:\/\/enterslice.com\/learning\/share-certificate-requirement-procedure\/\"><strong>share certificate<\/strong><\/a> within two months after the incorporation of the company. In case where additional shares are allotted to new or existing shareholders, the share certificate has to be issued within two months period from the allotment date.<\/p>\n\n\n\n<p>In case related to share transfer, the share certificate should be issued to transferees in one month of receipt of the instrument of transfer by such company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Allotment and Issue of Share Certificates<\/h2>\n\n\n\n<p>There are certain restrictions related to timelines within which securities are to be allotted after the company has received&nbsp;<strong>S<\/strong>hare Application&nbsp;money and within which the share certificates are to be issued.<\/p>\n\n\n\n<p>By the <strong>Companies Act, 2013<sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\"><strong>[1]<\/strong><\/a><\/sup><\/strong>, a public or private company may issue securities in any of the following manners:<\/p>\n\n\n\n<p><strong>Public Company-<\/strong><\/p>\n\n\n\n<ul><li>To the public through issue of Prospectus<\/li><li>Private Placement<\/li><li>Rights Issue or a Bonus Issue<\/li><\/ul>\n\n\n\n<p><strong>Private Company-<\/strong><\/p>\n\n\n\n<ul><li>Rights or Bonus Issue<\/li><li>Private placement<\/li><\/ul>\n\n\n\n<p>The time limits for allotment of securities and issuance of security certificates are as under:<\/p>\n\n\n\n<p><strong>Allotment of Securities<\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><table><tbody><tr><td><strong>S. No.<\/strong><\/td><td><strong>Particulars<\/strong><\/td><td><strong>Explanation<\/strong><\/td><\/tr><tr><td>1.<\/td><td>Allotment within 60 days<\/td><td>Allotment shall be done within 60 days of receipt of application money.<\/td><\/tr><tr><td>2.<\/td><td>If not allotted within 60 days, refund in next 15 days<\/td><td>If Allotment is not done within 60 days then refund the whole application money within next 15 days.<\/td><\/tr><tr><td>3.<\/td><td>If not refunded within 15 days<\/td><td>Refund application money along with interest @12% p.a. after the expiry of 60 days and it shall be treated as a public deposit after the expiry of the said 15 days.<\/td><\/tr><\/tbody><\/table>\n\n\n\n<p><strong>The Issue of Share Certificates<\/strong><\/p>\n\n\n\n<table class=\"table table-bordered\"><table><tbody><tr><td><strong>S. No.<\/strong><\/td><td><strong>Particulars<\/strong><\/td><td><strong>Explanation<\/strong><\/td><\/tr><tr><td>1.<\/td><td>In case of subscribers to memorandum<\/td><td>Within 2 months from the date of incorporation<\/td><\/tr><tr><td>2.<\/td><td>In the event of allotment of shares<\/td><td>Within 2 months from the date of allotment<\/td><\/tr><tr><td>3.<\/td><td>In the case of transfer or transmission of securities<\/td><td>Within 1 month from the date of receipt by the company of the instrument of transfer or intimation of transmission<\/td><\/tr><tr><td>4.<\/td><td>In case of issue of duplicate share certificate<\/td><td>Within 3 months of submission of complete documents and details with the company<\/td><\/tr><tr><td>5.<\/td><td>In case of allotment of debentures<\/td><td>Within 6 months from the date of allotment<\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\">Time limits in the case of a wholly-owned subsidiary of a foreign Company<\/h2>\n\n\n\n<ul><li>As per&nbsp;FDI Regulations&nbsp;read with&nbsp;<strong>FEMA<\/strong>, the share must be allotted against share application money received from non-resident within 180 days of its receipt.<\/li><li>Whereas, as per Rule 2(c) (vii) of the Companies (Acceptance of Deposits) Rules, 2014, any amount has been received for the purpose of subscription of shares and shares are not allotted within 60 days of its receipt the same shall be refunded within 15 days from the expiry of 60 days otherwise same shall be treated as deposits.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Penalty for breach relating to Share Certificate<\/h2>\n\n\n\n<p>In case of a company making default in complying with the provisions of issuance of share certificate, that company will be punished with minimum 25000 rupees fine that can extend to 5 lakh rupees. Every defaulting officer of that company shall be punished with fine of minimum 10000 rupees and can extend to 1 lakh rupees.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>From above, it is quite clear that a company should comply with the provisions related to share certificates or else they would be liable to pay penalty.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/enterslice.com\/learning\/what-is-the-procedure-for-shares-issue-through-bonus-issue\/\">\nWhat is the Procedure for Shares Issue through Bonus Issue?\n<\/a><\/mark><\/p>\n\n\n<a href=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2017\/08\/Share-Certificate.pdf\" class=\"pdfemb-viewer\" style=\"width: 767px; \" data-width=\"767\" data-height=\"max\" data-toolbar=\"bottom\" data-toolbar-fixed=\"on\">Share-Certificate<br><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n<\/table><\/table>","protected":false},"excerpt":{"rendered":"<p>On-time allotment of shares is a mandatory function of the Company and also, as per Companies Act, Share certificate should be issued within the statutory time frame. In this article we shall discuss about the issuance of Share Certificates. What are Share Certificates? Share certificate is a document that is issued by a company evidencing [&hellip;]<\/p>\n","protected":false},"author":35,"featured_media":42256,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2530],"tags":[560],"acf":{"service_id":"220"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Time Limits for Allotment and Issue of Share Certificates - Enterslice<\/title>\n<meta name=\"description\" content=\"Share certificates are documents that is issued by a company evidencing that a person named in that certificate is the owner of the company\u2019s shares.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/time-limits-allotment-issue-share-certificates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Time Limits for Allotment and Issue of Share Certificates - Enterslice\" \/>\n<meta property=\"og:description\" content=\"Share certificates are documents that is issued by a company evidencing that a person named in that certificate is the owner of the company\u2019s shares.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/time-limits-allotment-issue-share-certificates\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2017-08-19T06:55:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-06T10:30:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2017\/08\/Time-Limits-for-Allotment-and-Issue-of-Share-Certificates.png\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Ashish M. 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