Share Certificate is also known as Stock Certificate or Certificate of Stock which acts as the legal document that certifies the ownership of a specific number of stock shares. In an unspecified country only the shareholders with Share Certificate can vote in a shareholder’s general meeting. However in other countries such as Sweden the share certificate has been largely abolished and so people make use of electronic shares.A shareholder without a certificate may often give a proxy to another person to allow them to vote for the shares.
Share certificate is generally divided into two forms:
• Registered stock certificates and,
• Bearer stock certificates.
A registered stock certificate is only the evidence of title and about the true holders record of the share which appears in the stockholder's register of the corporation. A bearer stock certificate also known as bearer instrument. It ensures the holder to follow all the legal rights associated with the stock.
Bearer stock certificates are becoming uncommon and they become popular in offshore jurisdictions for their perceived confidentiality and also as a useful way to transfer beneficial title to assets without payment of the stamp duty.
The Reserve Bank of India acts as a Share Holders' Bank. The Share Issue of the Bank offered in March, 1935 was the largest share issue in India at that time. The Certificated was further described by the conditions and restrictions imposed under the Act. These conditions are related to the qualifications of shareholders. It also consists of the geographical distribution and allotment of shares in order to avoid concentration of shares and also to ensure that those who are holding the shares were right and proper. The Share Certificate forms of the different registers were printed in different colors. It was carried out with great accuracy and dispatch.