OMTEX CLASSES: PROCEDURE FOR ISSUING SHARE WARRANT?

PROCEDURE FOR ISSUING SHARE WARRANT?

    

Meaning: -A share warrant is a bearer document. It is issued by a public company without mentioning name of the holder. The person who has share warrant is entitled to the number of shares mentioned in it. This document can be transferred by mere delivery. Share warrant is a negotiable document. Even though it does not bear the name of the shareholder, it is a legal document. It is issued by the company under the common seal and it is signed by at least two directors and company secretary.

Procedure of issuing Share Warrant: -

1.       Written Application: - Shareholder has to make a written application to request to issue share warrant in exchange of his share certificate. He has to send necessary stamp duty and requisite (necessary) fee.

2.       Lodgement Ticket: -After the receipt of application, the secretary scrutinizes (check) it and issues a Lodgement Ticket. It is a document given as an acknowledgement for the deposit of share certificate.

3.       Board's Approval:-if the secretary is satisfied with the document and application, he places the request before the Board. A Board meeting is called especially for this purpose. A resolution (decision) is passed in this meeting regarding the issue of share warrant. The resolution also gives authority to sign and put seal on the warrant.

4.       Preparation of Share Warrant: - The secretary gets the share warrants prepared by making proper entries and putting a seal on it.

5.       Signing on the Warrant: -The share warrant is signed by the directors and countersigned by the secretary.


6.       Entries in the Register of Members: -The name of the share holder is cancelled from the Register by writing the particulars of share warrant, such as number of warrant, date of issue etc.

Delivery of Share Warrant: -Then the shareholder is informed about the warrant and the warrant is delivered to him in exchange of lodgement ticket.