Question

Explain the procedure for issuing share warrant.

Answer 1

Meaning: -
A share warrant is a bearer document. It is issued by a public company without mentioning the 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. A 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 a company secretary.

The procedure of issuing a Share Warrant: - 

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

2. Lodgement Ticket: -
   After the receipt of an application, the secretary scrutinizes (check) it and issues a Lodgement Ticket. It is a document given as an acknowledgment 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 the share warrant. The resolution also gives authority to sign and put the 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 shareholder is cancelled from the Register by writing the particulars of a share warrant, such as a number of the warrant, date of issue etc.