A share certificate is a document issued by a company that provides evidence of ownership of shares of the company, as per the details mentioned in the document. The company can issue shares up to the Authorized capital amount. Anyone who is authorized to buy the issued shares applies for the shares and upon approval buys the shares by giving the amount (money or equivalent) to the company. Then, the company produces and provides a share certificate to the person that proves the ownership of those shares (the portion of the company) by that individual.
1. What is Share Certificate?
A share certificate is a certificate issued by the company after the shareholders pay the agreed capital amount to the company.
2. When should the company issue and certify share certificates?
Every private company must submit various information to OCR within three months of registration, including a certificate of shareholding detail issued by the company. Within the specified period (shareholder promise to pay for the share), shareholders shall deposit the amount or pay the company for their shareholding. OCR then checks the documents and verifies the share certificates. During company registration in Nepal, the founders promise to buy certain numbers of Shares in the company. The division of shares in the MOA and AOA is just an expression of interest and promise of buying the specified amounts of shares once the company is registered successfully. So, after setting up a bank account, the company issues the shares and the founders buy those shares and become true shareholders of the company.
3. What should I do to get a share certificate?
To certify the share certificate-
- Issuance of share certificate, passed by the board at the general meeting of the company
- Each shareholder shall deposit the amount equivalent to the total share price he/she agreed to buy while incorporating the company.
- A letter stating the payment of paid-up capital is to be signed by the auditor.
- Submit the share certificates (two copies), bank statement of the company, and a letter signed by the auditor to OCR.
- OCR checks all the documents and certifies the share certificate and gives one copy to the company.
4. Should a share certificate be issued every year?
No, but in case of a change in shareholder i.e. shareholding, a new share certificate should be issued by the board resolution and certified.
5. Share lagat bhaneko k ho, kina ra kahile garnu parchha? I registered a private limited company 8 months ago.
Share certificate is called Share Lagat (शेयर लागत) in Nepali. You need to distribute the shares within one year of the formation of your company.