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CA Intermediate · Corporate and Other Laws · Share Capital and Debentures

Arvind Textiles Ltd, an unlisted public company, has issued 1,00,000 equity shares of Rs 10 each. Allotment of shares was made on 1 April. Under the Companies Act, 2013, within what time must the company deliver the share certificates after allotment, assuming no other period is specified by the conditions of issue?

The company must deliver share certificates within two months from the date of allotment. The shorter one-month period applies only after receiving an application for registration of transfer or transmission of shares, so it does not apply to a fresh allotment like this one.

  1. AWithin two months from the date of allotmentCorrect
  2. BWithin three months from the date of allotment
  3. CWithin one month from the date of allotment
  4. DWithin six months from the date of allotment

Explanation

The Act requires a company to deliver certificates within two months from the date of incorporation for subscribers, within two months after allotment, and within one month after receipt of an application for registration of transfer or transmission. Here the event is allotment, so the period is two months. One month applies to transfer, which is the common confusion.

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