FreeComplianceIssuing share certificates after incorporation
The first shareholders of a company are entitled to share certificates as proof of ownership. Under Section 56(4) of the Companies Act, they must be issued within two months of incorporation.
How to issue them
- 1.The board approves issue of share certificates at a board meeting.
- 2.Prepare certificates in Form SH-1, showing certificate number, folio, shareholder name, number of shares, distinctive numbers and amount paid.
- 3.Two directors (or a director and the company secretary) sign the certificates. A common seal is not mandatory.
- 4.Pay stamp duty on the certificates as applicable in your state.
- 5.Enter the details in the register of members in Form MGT-1.
Demat shares for private companies
Under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, private companies other than small companies must issue shares only in dematerialised form and have their existing shares dematerialised. The deadline for existing companies was 30 June 2025. This means getting an ISIN from NSDL or CDSL and appointing a registrar and share transfer agent.
Frequently asked questions
This guide is general information, not legal advice. Government fees and procedures change; confirm current figures before you file.
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- Post-incorporation compliance checklist for private limited companies
Everything a new private limited company must do in its first 180 days: board meeting, auditor, share certificates, INC-20A and more.
- Share transfer in a private limited company: process and stamp duty
How to transfer shares in a private limited company: AOA restrictions, SH-4, stamp duty, board approval, demat shares and tax.