A share certificate is proof of ownership of a company’s shares. The persons holding the share certificates are the shareholders of the company. Shareholders are commonly referred to as owners.
The preparation and issuance of a share certificate are usually done by the company secretary. The share certificate must be issued in accordance with the company’s constitution and the directors must be given the authority to issue shares pursuant to Section 161 of the Companies Act.
Section 161 states:
Notwithstanding anything in a company’s memorandum or articles, the directors shall not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares.
Thus to issue shares, a general meeting has to be convened.
To prevent confusion, the company secretary is usually the one to prepare, issue and in most cases, help to safeguard the share certificates of the shareholders. Most of our clients choose to leave the original share certificates with our company for safekeeping. We will release the share certificates to the shareholders upon request.
The following details should be stated clearly on the share certificate:
- The share certificate number
- The number of shares which that share certificate represents
- The name and registered address of the shareholder
- The authorised signatures
As of 31st March 2017, the company common seal is not required to be affixed on the share certificates. The maintenance of the register of members (sometimes referred to as the register of shareholders) is usually the responsibility of the company secretary.
If share certificates are lost, the shareholder can inform the company about the matter and new share certificates can be issued. The directors will have to pass a resolution confirming that the previous share certificates are missing and the secretary can prepare the new share certificates.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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