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WRITE SHORT NOTES/provision on SHARE WARRANT?



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.

Statutory PROVISION FOR ISSUE OF SHARE WARRANT

For issuing valid share warrant, following provisions should be observed by the company.

1.       A public limited company can only issue share warrants. Other companies cannot issue share warrants.
2.       The Articles of Association of the company must provide for the issue of share warrant.
3.       Issue of share warrant requires the permission of Central Government.
4.       Share Warrants can be issued only in case of fully paid shares and not in case of partly paid shares.

5.       Share warrants can be issued by the company on the request of shareholder. They cannot be issued by the company by itself.