[ecis2016.org] A share certificate is a legal document that establishes the rightful owner of the co-operative housing society’s shares
The managing committee of a housing society has the responsibility to issue share certificates. Just like the sale deed is an important document that the rightful owner of a property has in their possession, a share certificate is a proof that a rightful owner of the cooperative housing society’s shares, must possess. If you have not got yours, it is either because your housing society did not remember to issue it to you or, you are not aware. No worries. We tell you how to go about obtaining it.
You are reading: All you need to know about a share certificate
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A housing society issues a certificate, as proof of the fact that a particular member is a registered owner of the shares in the cooperative housing society. The model bye-laws of the state will indicate that a share certificate must have a distinctive number, along with the name of the housing society member, number of shares issued to the person and the value paid thereon. This shall be issued by the society to every member for the shares subscribed by him, within a period of six months of the allotment of the shares.
A share certificate is issued completely free of charge. It is the registrar, who decides the total authorised share capital. This happens at the time the society is registered. For example, a share may be valued at Rs 50 and the share certificates may be issued to the members with 10 shares per member.
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Note that in case a member’s dues are cleared and there are no encumbrances but if the society refuses to issue a share certificate, the member has full rights to file a legal notice/injunction against the society.
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- You must have the conveyance deed from the builder and it should be in the possession of your housing society.
- Before the housing society can issue a share certificate, ensure that the property is free of encumbrances. Make sure all dues are paid and there is no lien.
- The housing society will also ask you to provide an indemnity bond. An indemnity bond is binding and prevents the owner from transferring their share certificate to anyone, including an individual, employer, agency or bank or for any favours.
- The share certificate is issued by the managing committee but it must be collected by you.
- Once the share certificate is issued, check whether all the required signatures are present. These include the signatures of the chairman, the secretary and another member of the committee. The share certificate must also be authorised by the committee, before it is issued.
- Make sure there are no spelling mistakes in your name and that it is issued in the same order of names as on the original sale deed. This can help to avoid any confusion in the future.
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- In case of a resale, if the share certificate has to be transferred, all paperwork and necessary requirements pertaining to transfer of shares must be completed on time.
- It is the new member who needs to pay the transfer premium and ensure that all the dues are cleared by the previous home owner.
- In case of death of the original owner/member, his/her heir/s will have to apply, within six months, for the transfer of the share/s to the nominee. A new share certificate will be issued in this case.
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Like any other important document, issuing a duplicate share certificate is not simple. Nevertheless, it is doable, if you follow the procedure.
First, you must file an FIR in the local police station. If the share certificate is lost, misplaced or if you know it has been stolen, mention it in the FIR and retain a copy of the FIR for future reference.
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Second, the society must be aware that your original share certificate is lost. You should write an application to the society attaching a copy of the FIR.
Next, you must also give an indemnity bond of Rs 200 to the society, assuring that all costs or results of issuing a duplicate copy will be borne by you. This bond must be notarised too and the application, along with the bond and the FIR, must be provided.
The managing committee of the society will then review your application in the general body meeting and can approve/disapprove your request.
Let us assume that your request for a duplicate share certificate is approved. In such a case, your society will put out a notice on the noticeboard, plus publish notices in two local newspapers. This cost is borne by the member who has requested a duplicate certificate. After this, a 15-day window is required, during which objections to such issuance, if any, are reviewed. If there are no objections to issuing the duplicate share certificate, it is issued.
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FAQs
What is a conveyance deed?
A conveyance deed is a legal document of ownership right over property (land and building). With this, the builder can transfer the property ownership right to the housing society.
What happens if there are objections raised with respect to a duplicate share certificate?
If there are valid objections raised with respect to a duplicate share certificate, the matter can be taken up in a court of law.
Is nominee an owner?
A nominee is a temporary custodian of the shares of the deceased, so that it does not remain ownerless and his/her rights depend on the subject matter of nomination.
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Source: https://ecis2016.org
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