Shares

A Share Warrant is a document issued by the company under its common seal, stating that its bearer is entitled to the shares or stock specified therein. The person holding the warrant gets the benefits of shareholder. Section 114 in The Companies Act, 1956 had provided that Only a public company can issue share warrants. It must be authorized by the Articles of Association. The shares must be fully paid-up. The approval of the Central Government is necessary. It is a negotiable instrument and mere delivery transfers the ownership of the shares. Coupons are attached to each warrant, bearing the dates on which the dividend will be paid by the company as it cannot know who the shareholder or who is entitled to the dividends. The person who produces the appropriate coupon can receive payment of the dividend. In the balance sheet (c) Money received against share warrants is shown under Shareholder Funds

Sudha Reddy

CA Final

★ 20K+

30-Sep-21 10:44