Share Certificate Format — explained: this guide covers what Share Certificate Format — means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
What Is a Share Certificate?
A share certificate is a document issued by the company under its common seal (or signed by authorized signatories if no common seal) evidencing the title of the person named therein to the specified number of shares in the company. Under Section 46(1) of the Companies Act, 2013: "A certificate, issued under the common seal of the company or signed by two directors or by a director and the Company Secretary, specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares." The share certificate is issued in Form SH-1 under Rule 5(2) of the Companies (Share Capital and Debentures) Rules, 2014.
Form SH-1 — Share Certificate Format
CIN:
Registered Office:
SHARE CERTIFICATE (Form SH-1)
Certificate No.: | Folio No.:
This is to certify that of is the registered holder of Shares of Rs. each, bearing Distinctive Numbers to , of , subject to the Memorandum and Articles of Association of the Company.
Date of Issue:
Given under the Common Seal of the Company / Signed:
Director: | Director/Company Secretary:
Timeline for Issue
Under Section 56(4) read with Rule 5: (a) Subscribers to MOA: Share certificates must be issued within 2 months of incorporation. (b) Allotment: Within 2 months of the allotment of shares. (c) Transfer: Within 1 month of receipt of a valid transfer application (Form SH-4). (d) Transmission: Within 1 month of receiving documents for transmission (death/insolvency of shareholder). Penalty for delay: the company and every officer in default — fine of Rs. 5,000 per day of default (Section 56(6)).
Mandatory Dematerialization
The trend in India is toward mandatory dematerialization of shares: (a) Listed companies: Shares must be held in demat form — physical share certificates are being phased out. Transfer of listed shares can only be in demat form (SEBI mandate effective April 1, 2019). (b) Public unlisted companies: All public companies must facilitate demat — transfers in physical form are restricted. (c) Private companies: MCA has been progressively mandating demat for private companies — deadline has been extended multiple times (latest extension to June 30, 2025 per MCA notification). Private companies meeting certain thresholds must now issue shares in demat form.
Despite dematerialization: the legal concept of share certificates remains relevant because: (a) existing physical certificates need to be converted to demat, (b) the company issues a "Statement of Holding" from the depository (equivalent to a share certificate in demat), (c) for transmission/succession: original share certificates may be needed.
Contents of Share Certificate — Rule 5(2)
The share certificate must state: (a) name of the company and CIN, (b) registered office address, (c) name and address of the registered holder, (d) folio number, (e) number of shares, (f) face value per share, (g) distinctive numbers (for physical shares — from __ to __), (h) amount paid-up per share, (i) date of issue, (j) signed by 2 directors or 1 director + Company Secretary (or under common seal).
Duplicate Share Certificate
If a share certificate is lost, stolen, mutilated, or defaced: the member can apply for a duplicate share certificate. Procedure under Rule 6: (a) member submits a written request to the company (with FIR/police complaint for lost certificates and an indemnity bond), (b) the Board passes a resolution approving the issue of duplicate certificate, (c) the company issues a duplicate certificate — stamped "DUPLICATE" prominently on its face, (d) the duplicate certificate has the same folio number but a new certificate number, (e) file Form SH-2 with ROC. The company may require: (a) newspaper advertisement (mandatory for listed companies — in 1 English + 1 vernacular newspaper), (b) indemnity bond from the member, (c) surety from a third party (for high-value certificates).
Stamp Duty on Share Certificates
Share certificates are chargeable to stamp duty under the Indian Stamp Act — typically a nominal amount (Rs. 0.25 per share certificate or as per state schedule). The stamp is affixed on the certificate or the duty is paid through franking/e-stamp. Non-payment of stamp duty: the certificate may be inadmissible as evidence until the deficiency and penalty are paid.
Share Certificate vs Demat Statement
| Feature | Share Certificate (Physical) | Demat Statement |
|---|---|---|
| Form | Physical document — Form SH-1 | Electronic record from NSDL/CDSL |
| Issue | By the company | By the depository through DP |
| Transfer | Form SH-4 + certificate delivery | Electronic — through DP instructions |
| Risk | Loss, theft, forgery, mutilation | Minimal — electronic records |
| Stamp Duty | Applicable on certificate | Not applicable |
| Trading | Restricted (listed cos — demat only) | Full trading facility |
Recent Updates (2025-26)
(a) Mandatory demat for private companies: MCA has been gradually mandating dematerialization — companies should prepare for full demat compliance. (b) Digital share certificates: Some companies issue digitally signed share certificates (with DSC) — acceptable under the IT Act, 2000. (c) IEPF impact: Shares for which dividends remain unclaimed for 7 years are transferred to IEPF — the share certificate is cancelled and IEPF holds the shares in demat form. (d) MCA V3 portal: Forms SH-2 (duplicate certificate), SH-7 (increase in capital), PAS-3 (allotment return) now filed on V3 portal.
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.