Overview

BACKGROUND/ OVERVIEW

A share certificate is a document issued by a company, confirming that the individual named in the certificate is the rightful owner of the specified shares of the company. According to the Indian Companies Act, it is mandatory for companies to issue share certificates after their incorporation.

As a legal instrument, a share certificate must undergo stamping in accordance with the Indian Stamp Act. The stamp duty on share certificates is governed by state regulations, and failure to promptly pay the stamp duty incurs penalties. Initially, stamp duty is levied at the time of incorporation on share certificates issued to subscribers, and subsequently, on each additional allotment of shares.

Process

PROCESS

• Visit the official website of Stock Holding of India and create an account of the company.
• Fill the company share entry details form.
• Attach the requisite documents.
• After submitting the documents, Reference Number will be generated, and challan shall be generated.
• Pay stamp duty amount as per the challan, print the acknowledgment and collect the e-Stamp Certificate from any nearest Stockholding branch.
• Upload the scan copy of e-Stamp Certificate.
• After scrutiny, Certificate of payment of Stamp Duty will be generated which can be downloaded from the status menu.

Required Document

LIST OF DOCUMENTS REQUIRED

• Certified copy of Memorandum & Article of Association.
• Certified true copy of Form-2 or PAS-3 as the case may be along with list of allottees.
• Certified true copy of board resolution for issuance of shares to the allottees.
• Copy of PAN Card of the Company
• List of Share Holders of the Company
• List of Directors of the Company
• Special Power of Attorney
• Photocopies of Share Certificates.

Common Mistake

COMMON MISTAKES

• Ensure that you provide accurate and complete information about the document.
• Double-check the payment details, to avoid payment failures or discrepancies.
• When affixing the e-stamp certificate to the document, make sure it is done correctly and securely. Incomplete affixing can result in the document being considered invalid.
• Ensure that you use a valid certificate when affixing it to a document.
• Maintain a record of all e-stamp certificates and their respective documents for future reference and verification.

FAQ

• In how many days stamp duty shall be paid to the relevant department?

Within 30 days of issue of share certificates, stamp duty shall be paid.(Here payment of Stamp Duty means application to be filed to Stamping Authority i.e. Revenue department of the state, for payment of Stamp duty within 30 days of issue of Share Certificates)

• What are the penalties in case of nonpayment of stamp duty?

The superintendent has the power to put penalty, 10 times of the amount of stamp duty.

• What will happen if we are filling the application after 30 days?

If the matter got delayed due to any reason and an application filed is beyond 30 days then the matter will directly be called for hearing. A hearing date will be given to the Company. An opportunity of being heared shall be given to the Company by the Superintendent. The representative of the Company have to present its case by giving a valid reason of not filing it on time. The superintendent will be charging the penalty accordingly up to the maximum of 10 times of the amount of stamp duty.