Distinction between a Share Certificate and a Share Warrant
The following are some of the differences between Share Certificate and Share Warrant.
1. A share certificate is to be issued both by public and private companies. But share warrants can be issued only by public companies.
2. A share certificate can be issued both for fully paid up and partly paid up shares. But a share warrant can be issued only in respect of fully paid up shares.
3. A share certificate can be issued without the prior approval of the Central Government. But a share warrant can be issued only with the approval of the Central Government.
4. The holder of a share certificate is a registered member of the company. But the holder of a share warrant cannot be a member of the company [unless the articles permit].
5. A share certificate ‘is not a negotiable instrument. But a share warrant is a negotiable instrument.
6. Nominal stamp duty is required for issuing a share certificate. But heavy stamp duty is required for the issue of a share warrant.
7. The name of the holder of share certificate appears in the share certificate and in the Register of Members. But the name of the person who holds the share warrant does not appear either in the warrant or in the Register of Members.
8. A share certificate can be transferred by a transfer deed. The transfer is to be registered with the company. A share warrant, on the other hand, can be transferred by mere delivery.
9. The number of shares mentioned in the share certificate constitute the share qualification for directorship. But share warrant does not constitute the share qualification for directorship.
10. The holders of share certificates can apply to the National Company Law Tribunal for the winding up of the company. But the holders of a share warrant cannot file a petition to the National Company Law Tribunal for the winding up of the company.
11. No dividend coupons are attached with the share certificates. But in case of share warrants, dividend coupons are attached and the bearer of the coupons can get the dividend.
12. Stamp duty is payable for transferring the shares mentioned in a share certificate. But no stamp duty is payable for the transfer of a share warrant.
13. The holder of a share warrant is not qualified as a director of the company (where qualification shares are prescribed) but the holder of share certificate is so qualified.
14. Since a share warrant is a negotiable instrument, previous permission of the Reserve Bank of India is also required for issuing share warrants. But it is not required for share certificates.