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Indian Companies Act, 1956

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Y are Capital
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]t er features of a s are
 A s are is not a negotiable instrument, but
it is a movable property
property..
 It is also considered to be goods under t e
Yale of Goods Act, 1930.
1930.
 T e company as to issue t e s are
certificate..
certificate
 It is subject to stamp duty
duty..
 T e µCall¶ on Y ares is a demand made for
payment of price of t e s ares allotted to
t e members by t e Board of Directors in
accordance wit t e Articles of Association
Association..
 T e call may be for full amount or part of it.
it.
Y ares issued for consideration

 Y ares issued for cas must be paid up at

t e time t e company is incorporated to at
least 25
25% % of t eir nominal value or, if none,
t eir accountable parpar..
 W ere s ares are issued for a consideration
ot er t an in cas , t e consideration must be
transferred in full wit in five years of t e
incorporation..
incorporation
 If capital is issued for non-
non-cas consideration,
an independent expert as to assess t e
value of t e consideration
Y are Certificate and Y are
Warrant
 Y




 T e Y are Certificate is a
document issued by t e company and is prima facie
evidence to s ow t at t e person named t erein is
t e older ( title) of t e specified number of s ares
stated t erein.
 Y are certificate is issued by t e company to t e (
s are older) allottee of s ares.
 T e company as to issue wit in 3 mont s from t e
date of allotment. In case of default t e allottee may
approac t e central government
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 T e s are warrant is a bearer
document issued by t e company under its common
seal. As s are warrant is a negotiable instrument, it
is transferred by endorsement and by mere delivery
like any ot er negotiable instrument.
inds of s ares
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 It can be furt er classified as

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Transfer and Transmission of
s ares
 A]A provides for t e procedure of transfer
of s ares. It is a voluntary action of t e
s are older.
 It can be made even by a blank transfer ±In
suc cases t e transferor only signs t e
transfer form wit out making any ot er
entries.
 In case it is a forged transfer, t e
transferor¶s signature is forged on t e
s are transfer instrument.
 Transmission of s ares is by operation of
law, e.g. by deat , insolvency of t e
s are older etc.
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