Issue of share warrants to bearer (Section 114)

A ‘share warrant’ is a document issued by a public company stating that its bearer is entitled to the shares specified therein. It is transferable by mere

delivery and is a substitute for the share certificate. It will be interesting to know that a share warrant is a negotiable instnnnent.

A public company limited by shares may convert its fully paid-up shares into share warrants. One great advantage of issuing warrants is that shares can

be transferred by mere delivery of tbe warrant. Tbe registration of the transfer of shares in such a case with tbe company is

not necessary. .

Follmvjng ure the legul I)rovisions us to the validity of I shure

wurnmt (Section 114) : . .

I. It must bave the common seal of tbe company affixed on it.

2. It must be issued only in respect of fully paid sbares.

3. It 11111St specify tbe number of sbares.

4. It must state that its bearear is entitled to the shares specified in it. 5. It can be issued only by a public company limited by shares.

6. The Articles n1l1st have autborised the issue of share warrants. 7. The prior approval of tbe. Central Government must have been

obtained for the issue of share warrant. .