duplicate is rarely issued and that too upon satisfactory evidence and indemnity

Surrender. Section 115(2) of the Companies Act entitles the bearers of a share-warrant to surrender it for cancellation and, on payment of a fee

prescribed by the Board of Directors and subject to the articles of the company, he can have his name entered as a member in the register in respect of

shares which were included in the wammt and to have a share certificate isslled in his name.

ReSI)Onsibility of Compan)’. The company shall be responsible for any loss incurred by an)’ person by reason of the company entering in its register of

members the name of a bearer of a share warrant in respect of the shares therein specified, without the warrant being surrendered and cancelled.

Penalty. Non-compliance of the provisions of Sec. 115 shall entail a fine for the company and its every officer who is in default upto Rs. 500 for every day

till such time the default continues. [Sec. 115(6)].

Share Warrant and Share-Certificate.

Share Certificate and Share Warrant

I. Issue

Share Certificate

Share Warrant

A share eertilieate can be issued originally at any stage, whether shares are fully paid-up or not.

A prospectus is a document which induces the public to invest

their money in the shares or debentures of the company. The public invest . the money in the company on the basis of the information disclosed in the nature of the company must be truly, honestly and accurately disclosed in the prospectus. It should neither contain any

omit to disclose any material fact. This is known as the golden rule as to the framing the prospectus

According to Section 65(J) of the Companies Act, 1956.

(i) a statement included in a prospectus shall be deemed to be untrue,

if the statement is untrue in the form and context in which it is included: and

(ii) where the omission from a prospectus of any matter is calculated

to mislead, the prospectus shall be deemed, in respect of such omission. to be a prospectus in which an untrue statement is included. The expression “included’ with reference to a prospectus. means included in the prospectus itself or contained in any report or Memorandum appearing on the face thereof or by reference incorporated therein or issued therewith. In order to call a prospectus misleading these must be misrepresentation of facts and not of law r expectation. For example, a prospectus contained that the company will issue the shares at half of their nominal value, whereas Sec. 79 prohibits a company to issue shares at a discount exceeding 10 per

cent. It is a misrepresentation of law and not of fact. The allotted of shares therefore has no remedy. One thing should also be looted that the statement should not be true only at the time of their inclusion in the prospectus. but milts continue to be so. till the

shares are allotted. [In Rajagopala Iyer Vs. The South Indian Rubber Works Ltd. (1942) A.I.R. Mad. 656].

Remedies for Mis-statements ami Omissions in a PrOSI)CctllS. The remedies available to a person who has subscribed for shares on the faith of a misleading prospectus, may broadly be grouped into two categories:

I. Remedies against the company.

II. Remedies against the directors, promoters and experts. We shall now examine the nature of these remedies in detail.

Registrar of Companies within 30 days of making the change

Shifting of Rcgistcl'cd Office from thc JUI'isdiction of onc Rustler of Companies to the Jurisdiction of anthill' Registrar of Coml.):micas in the same State. In two States, i.e., Maharashtra and Tamil Nadu-there arc more than one Registrar of Companies (RoC). Where the registered office of the company is to be shifted from one city to another in the same tate but within the jurisdiction of another RoC. In such case; confirmation from the Regional
Director is required. The Regional Director, on an application for shifting of registered office, after giving an opportunity being heard to the company, shall complicate confirmation or otherwise within four weeks. Before making an application to the Regional Director, the company shall pass a special Resolution to that effect. After the confirmation. the company shall file the certified copy of the confirmation within two months with the RoC who shall
make the necessary changes in the register and talker the records to the Registrar in whose jurisdiction the registered office is being shifted. A copy of the altered Memorandum is also to be filed with the new Registrar of Companies (perhaps there is a drafting mistake in this section. Memorandum of Association only mentions the name of the State and when the registered office is shifted within the State, it requires no alteration of Memorandum). The
Registrar will issue fresh registration certificate within one month of filing the certified copy of the confirmation order. In the meanwhile, the company shifts the registered office to its new location. A notice of the new address shall be given to the new Registrar within 30 days of shifting the office.
3. Shifting of Registered Office within the Same State. Where the' registered office of the company is to be shifted from one city. town or villageto another city, town or village in the same State (and within the jurisdiction of the same RoC), the company shall pass a special resolution at the general meeting of members authorizing the change and file a copy of such resolution with the Registrar of Companies within 30 days from the date of passing of
the resolution. A notice of change of registered office should be given to the Registrar within 30 days of the shifting of the registered office.
4. Shifting of Registered Office from one State to Another. Where the registered office is proposed to be shifted to some other State, only then the Memorandum of Association is to be altered. The change is permissible only on any of the reasons enumerated for altering the object clause of the Memorandum. (See next question for alteration of object clause). In addition, the company has to follow the following procedure-
(0) It must pass a special resolution authorizing the change in the registered office. A copy of such resolution should be filed with the Registrar within 30 days of passing of the resolution.
(b) The alteration nulls be confirmed by the Company Law Board. Before confirming the alteration, the Company Law Board should satisfy itself sufficient
notice has been given to (a) all creditors; (b) other persons whose interests are likely to be affected by the proposed change e.g. banks, financial institutions, employees, etc. and every such creditor who objects to it has either been paid in full or his debt has been fully secured; (c) Registrar of Companies so that he may state his objections and suggestions to the Company

Law Board. The Company Law Board then issues a confirmation order on such terms and conditions as it thinks fit.
(c) The certified copy of the confirmation order together with the altered copy ofMemorandl Un of Association must be filed with the Resisting of both the States within three months of the order. Both the Registrars must register the same and certif.(y the registration within one month from the date of filing of such documents. Further, the Registrar oath present State shall send the records of the company to the Registrar of the proposed State.
(d) Certificates of registration of the transfer are to be obtained from both the Registrars.
(e) The registered office is shifted to its new location in the proposed" State. The company must submit the notice of new address to the Registrar within 30 days oithe shifting of the office.

CONVERSION OF A PRIVATE COMPANY INTO A PUBLIC COMPANY

What are the provisions of the Companies Act, 1956 for the conversion of
(i) a private company into a public company, and (ii) a public company into a private company.
1. CONVERSION OF A PRIVATE COMPANY INTO A PUBLIC COMPANY
A private company becomes a public company in the following circumstances:1. Conversion by default (Section 43) or automatic conversion.
2. Conversion by choice (Section 44) or deliberate conversion.
1. Conversion by default. A private company may become a public
company by default, as provided in Section 43.
If a private company fails to comply with the essential requirements
of a private company (via, restrictions on transfer of shares; limitation of the number of members to 50; and, prohibition of invitation to the public to buy
shares or debentures) or prohibition of invitation or acceptance of deposits from the public), it becomes a public company automatically, it shall cease to
enjoy the privileges of private companies and the company will be treated as if it were a public company-Section 43. However, discretion is given to the
Company Law Board to grant relief to the company from such consequences where the Company Law Board is satisfied that the failure to comply with
the conditions was accidental or due to the inadvertence or to some other sufficient cause. Such relief may be granted under such terms and conditions
as the Company Law Board thinks it just and equitable.
2. Conversion by Choice (Section 44). A company may, of its own
choice, become a public company.
The following steps are necessary for this purpose:
(i) Special Resolution. A private company desiring to become a
public company must pass a special resolution in order to alter its Articles of Association and deleting the restrictions contained therein under Section 3
(1) (iii) (i) restrictions on transfer of shares, (ii) the limitation on maximum membership, (iii) prohibition of invitation to the public for subscribing to its
shares] or debentures (iv) prohibition of invitation or acceptance of public deposits]. A copy of the special resolution so passed, a copy of altered Articles
together with a copy of 'prospectus' or 'statement in lieu of prospectus' must be filed with the Registrar within 30 days of its passing: The other steps to be

taken are
(i) Enhancement of paid up capital. The company will raise its paid up capital upto Rs. 5,00,000 if it is below this limit.
(ii) Deleting the word Ltd. The company will delete the word 'private' from its name.
(iii) Increase in membership. If the number of members is less than seven, it must be raised to not less than seven.
(i1') Increase in number of directors. If the number of directors is less than three, it must be raised to not less than three.