Question

Which of the following statements are correct?
A duplicate certificate of shares may be issued, if such certificate: -
(i) Is proved to have been lost, or destroyed.
(ii) Has been defaced, and is surrendered to the company.
(iii) Has been mutilated, or torn and is surrendered to the company.
(iv) Has been pledged to the company.

• A. Only (i), (ii), and (iii)
• B. Only (i), (ii), and (iv)
• C. Only (i), (iii), and (iv)
• D. Only (ii), (iii), and (iv)

Hint:

Issuing duplicate certificates without proper verification of loss or without surrendering mutilated certificates is a serious offense under the Companies Act, carrying heavy penalties.

Answer 1

The Correct Option is A

Step 1: Understanding the Question:
The question asks about the legal conditions under which a company can issue a duplicate share certificate to a shareholder under the Companies Act, 2013.

Step 2: Detailed Explanation:

• Section 46(2) of the Companies Act, 2013: This section, read along with the Companies (Share Capital and Debentures) Rules, 2014, governs the issue of duplicate share certificates.

• Conditions for Duplicate Certificate: A duplicate share certificate may be issued if:
1. It is proved to have been lost or destroyed. (Statement i)
2. It has been defaced, mutilated, or torn and is surrendered to the company. (Statements ii and iii)

• Pledging of Shares: Pledging shares as security does not result in loss or defacement of the share certificate.
The physical certificate remains intact in the custody of the pledgee (lender).
Therefore, the company cannot issue a duplicate certificate for a pledged share. (Statement iv is incorrect)

Step 3: Final Answer:
Statements (i), (ii), and (iii) are correct, which corresponds to Option A.