A company share certificate is a formal document that records a shareholder’s registered ownership of shares in a company. For physical shares, it identifies the holder, class and number of shares, amount paid-up and other prescribed details. Under Section 46 of the Companies Act, 2013, it serves as prima facie evidence of title. The certificate must be issued in the prescribed manner and within statutory timelines. However, where shares are held in dematerialised form, the depository’s records serve as evidence of the beneficial owner’s interest instead of a physical certificate.
A company share certificate is a formal document that records a person’s registered holding of shares in a company. For a physical holding, it identifies the shareholder, the number and class of shares held and the amount paid on those shares. Under Section 46 of The Companies Act, 2013, a valid share certificate is prima facie evidence of the holder’s title to the shares.
For foreign businesses and overseas investors subscribing to an Indian Company, the certificate is only one part of the ownership record. The allotment, Register of Members, payment records and, where applicable, FEMA reporting must tell the same story. The position is also different from where shares are held in dematerialised form. In that case, the depository’s record is the prima facie evidence of the beneficial owner’s interest, so a physical certificate is not automatically issued. To some it might sound confusing and for that it is generally advised to get in touch with a professional business consulting service. However, let’s try and understand what Shareholder certificate, also called Share Certificate entails and why it is important for businesses.
What is a Share Certificate in India?
A share certificate in India is a document issued by a company to identify shares registered in the name of a particular holder. Section 46 provides that it is prima facie evidence of title. In simpler terms, this means the certificate is accepted as evidence of the holder’s legal title unless evidence establishes otherwise.
The certificate does not represent the market value of the shares. For example, a share may have a nominal value of INR 10 while its actual economic value is considerably higher. The certificate records the legal holding, not the current investment value.
Section 44 also treats shares as movable property, transferable in the manner provided by the company’s Article of Association. Section 45 requires shares to have distinctive numbers, but this requirement does not apply to shares held through a depository.
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Rule 5 of the Companies (Share Capital and Debentures) Rules, 2014 applies to certificates where shares are not held in dematerialised form. It requires the certificate to be in Form SH-1, or as near to that form as possible, and specifying the holder, the relevant share and the amount being paid up. The Form HS-1 structure includes particulars such as:
| Particular | What it identifies |
|---|---|
| Company name and CIN | The legal identity of the issuing company |
| Registered office | The company’s registered office |
| Certificate number | The certificate’s unique reference |
| Folio number | The holder’s reference in the company’s register |
| Holder’s name | The registered shareholder |
| Class and number of shares | The nature and quantity of shares |
| Nominal value and amount paid-up | The face value and amount paid on each share |
| Distinctive numbers | The identifying number range for physical shares |
| Date of issue | When the certificate was issued |
A distinctive number is an individual identification number assigned to a physical share. Section 45 specifically excludes shares held through a depository from this numbering requirement.
When Must a Company Issue a Share Certificate?
The Companies Act sets specific delivery periods under Section 56 (4). The relevant timelines are:
| Event | Statutory period |
|---|---|
| Subscribers to the memorandum | Within 2 months from incorporation |
| Allotment of shares | Within 2 months from allotment |
| Transfer or transmission | Within 1 month from receipt of the transfer instrument or intimation of transmission |
Where securities are dealt with through a depository, the companies instead have to intimate the allotment details to the depository immediately on allotment. The above shared timelines in the table concern certificates where a certificate is applicable.
Subscribers to the memorandum have a statutory two-month period, but a company that is subject to applicable dematerialisation requirements may record the holding through the depository instead of issuing a physical document.
How is a Shareholder Certificate Issued?
For a physical certificate, Rule 5 requires a Board resolution authorising its issue. The Certificate is prepared in Form SH-1 or a substantially similar form. It is then authenticated in accordance with the applicable signing rules. Once done, its particulars are entered in the Register of Members which is maintained under Section 88. The sequence of issuance of share certificate includes:
- Shares are subscribed for or allotted
- The required corporate approval is completed
- The certificate is prepared in the prescribed form
- The authorised persons sign it and the applicable common-seal requirements, if any, are followed.
- Applicable stamp duty requirements are addressed
- The certificate details are entered in the Register of Members
- The certificate is delivered to the registered holders.
The company should ensure that the shareholder name, number and class of share and paid-up capital match the underlying allotment and corporate records.
Who Signs a Share Certificate?
Section 46 and Rule 4 provide the signing framework. A certificate may be issued under the company’s common seal, if it has one, or signed by two directors or by a director and the Company Secretary where the company has appointed one. The Rules also contain a specific treatment for One Person Company.
Physical Share Certificate and Dematerialised Shares
A physical share certificate is relevant only where the share is held in physical form and the applicable law permits or requires such treatment. Section 46(5) states that where a share is held in depository form, the depository record is prima facie evidence of the beneficial owner’s interest.
Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014 introduced dematerialisation requirements for private companies that are not small. The rule provides a compliance period lined to the relevant financial year. Specific amendments were done in the year 2024 and 2025. The 2025 amendment gave a specific extension up to 20 June 2025 for private companies covered by the stated 31 March 2023 category.
For an overseas investor, the key question is whether ownership is evidenced by a physical certificate or by the depository records. The two should not be treated as interchangeable documents.
Share Certificate Cost and Stamp Duty
There is no universal share certificate cost that can be quoted for every company. The applicable cost includes statutory stamp duty and transaction-specific compliance expenses.
Stamp duty, on the other hand, depends on the applicable stamp law and nature of the instrument and transaction. The Indian Stamp Act contains specific provisions concerning securities and transactions through stock exchanges and depositories, so the physical and dematerialised holdings should not be treated identically.
The cost should therefore be confirmed based on the company, state or applicable stamp regime, type of transaction and current rules. Get in touch with professionals at Stratrich to get an estimated price range for acquiring Share Certificate.
What Happens if a Share Certificate is Lost or Damaged?
Section 46 permits a duplicate certificate where the original document has been proved lost or destroyed, or where it has been defaced, mutilated or torn and surrendered to the company. Rule 6 provides additional safeguards. A duplicate for a lost or destroyed certificate requires prior Board consent and reasonable supporting evidence or indemnity as applicable. The duplicate must be clearly identified as a duplicate and recorded in the prescribed register.
For unlisted companies, Rule 6 provides a three-month period for issuing a duplicate certificate after submission of complete documents.
Section 46 specifically imposes serious consequences where a company issues a duplicate with the intent to defraud. Therefore, a company must not issue a duplicate casually.
Conclusion
A shareholder certificate is a formal part of the ownership records for shares held in physical form and, under Section 46, provides prima facie evidence of title. However, the position in 2026 is not simply a choice between paper and electronic documents. Where shares are held through a depository, the depository record is the relevant evidence of the beneficial owner’s interest.
Getting share certificate issued, allotment records, Register of Members and applicable demat or FEMA records aligned helps establish a clear ownership trail, particularly where an Indian subsidiary has a foreign parent or overseas shareholders. Foreign businesses seeking clarity on share ownership and corporate compliance in India can get in touch with professionals at Stratrich Consulting for assistance based on their specific requirements.
Frequently Asked Questions (FAQs)
Yes, for shares held in physical form, a share certificate issued in accordance with Section 46 is prima facie evidence of the holder’s title to those shares. “Prima facie” means that the certificate is accepted as evidence unless contrary evidence establishes otherwise. It should not, however, be confused with a valuation document. The certificate records the shares held, rather than their current market or economic value. Where shares are held in dematerialised form, Section 46(4) provides that the depository’s record is prima facie evidence of the beneficial owner’s interest instead of a physical certificate.
The statutory period depends on the transaction. For subscribers to the memorandum, the company must deliver the certificate within two months from company incorporation. For an allotment of shares, the period is two months from the date of allotment. For a transfer or transmission, the relevant period is one month from receipt of the transfer instrument or intimation of transmission. These rules apply where a certificate is applicable. Where securities are dealt with through a depository, the company must instead intimate the allotment details to the depository immediately on allotment.
No. A physical certificate is not universally mandatory. Section 46 expressly recognises dematerialised holdings and provides that the depository’s record is prima facie evidence of the beneficial owner’s interest. In addition, Rule 9B introduced dematerialisation requirements for private companies that fall within its scope, with amendments affecting the applicable compliance periods. Therefore, a company should first determine whether its securities are required to be held in dematerialised form. A foreign investor should similarly establish whether its Indian shareholding is represented by a physical certificate or through a demat account before expecting a paper certificate.
A company can issue a duplicate certificate where the original has been proved lost or destroyed. Rule 6 requires prior Board consent and permits the company to require reasonable supporting evidence, indemnity and related expenses. The duplicate must be prominently identified as such and the relevant particulars must be entered in the Register of Renewed and Duplicate Share Certificates. For an unlisted company, the Rules provide a three-month period for issuing the duplicate after complete documents are submitted. These safeguards are intended to prevent an unauthorised person from using a lost certificate to assert ownership.
Form SH-1 is the prescribed form for a physical share certificate under Rule 5(2) of the Companies (Share Capital and Debentures) Rules, 2014. The certificate must be in Form SH-1 or as near to it as possible. It identifies the registered holder, the relevant shares and the amount paid up, with the prescribed certificate particulars. The form also accommodates details such as the certificate number, folio number and distinctive numbers where applicable. It is therefore not merely a suggested share certificate format. It is the statutory model that companies issuing physical certificates are required to follow.
