Meaning: -A share warrant is a bearer document. It is
issued by a public company without mentioning 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. 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 company secretary.
Procedure of issuing Share
Warrant: -
1. Written
Application: - Shareholder has to make a written application to
request to issue share warrant in exchange of his share certificate. He has to
send necessary stamp duty and requisite (necessary) fee.
2.
Lodgement Ticket: -After the receipt of application, the
secretary scrutinizes (check) it and issues a Lodgement Ticket. It is a
document given as an acknowledgement 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 share warrant. The resolution
also gives authority to sign and put 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 share
holder is cancelled from the Register by writing the particulars of share
warrant, such as number of warrant, date of issue etc.
