incidental to the application [Sec. 113 (3)]. The delivery of certificate should be in the mode prescribed uls 53 either personally or by post.
Stickers on Share Certificates. A share certificate has to be issued by the company whether shares arc fully paid up or partly paid up. Where shares are
partly paid up and the shareholder pay, the call money, necessary endorsement should be made on the share certificate. Previously, companies were
asking the shareholders to return the share certificate for making necessary endorsement. The present practice is that, after call money is received by the
company, it sends a sticker which the shareholder has to stick on a pre-determined place on the share certificates. This is convenient as it avoids costs of
sending the share certificate for endorsement and its return.
Share certificate is a prima-facie evidence of title of a member. Legal Effects of Issue of Share Certificate. The legal effects of the
issue of a share certificate are mainly two:
1. Estol)pel as to Title. A share certificate under the seal of a company is prima facie evidence of title, i.e., it estoppes the company from denying the title
of the person, to the shares, wbose name is mentioned therein, provided he acquires the share in good faith (i.e. without notice of forgery), for value and
under a genuine tnmsfer. Thus. a share certificate is a declaration by the company to the whole world .that the person in whose name the certificate is
made out. and to whom it is given, is a shareholder in the company.
also a stock broker. D applied for 300 shares in the company, and paid for them. L’s clerk. who owned no shares. executed transfer in fhvour of D. The
company. without requiring the production of a share certificilte from the clerk. registered the tmnsfer and gave D a new certificate. Hec. the company
was estopped from denying the validity of D’s certificate. and was liable for damages to D.
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