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As per Indian stamp act 1899, Stamping is a tax on the documents executed in India, share Certificates comes under the definition of Instrument, hence it is liable to be stamped as per the government specifications. Government gets huge revenues through the process of stamping.
Stamping provides the legality to the documents that are executed in India.
Rate of stamping differs from state to state.
Properly stamped documents are admissible as evidence in the court of law.
As per section 56 (4) of the Companies Act, 2013:
Within 30 days of issue of share certificates, stamp duty shall be paid.(Here payment of Stamp Duty means application to be filed to Stamping Authority i.e. Revenue department of the state, for payment of Stamp duty within 30 days of issue of Share Certificates)
The superintendent has the power to put penalty, 10 times of the amount of stamp duty.
Rate of Duty for Nct of Delhi: One rupee for every one thousand, or a part thereof, of the value of the shares, scrip or stock. (Rate of Stamp Duty differs state wise).
If the matter got delayed due to any reason and an application filed is beyond 30 days then the matter will directly be called for hearing. A hearing date will be given to the Company. An opportunity of being heared shall be given to the Company by the Superintendent. The representative of the Company have to present its case by giving a valid reason of not filing it on time. The superintendent will be charging the penalty accordingly up to the maximum of 10 times of the amount of stamp duty.
It is a document issued by the company to its shareholders stating that the holder of the certificate is the owner of number of shares mentioned on the certificate.
Following documents are required:
In Case of Incorporation:
Application having details of the allotted Shares.
In case of allotment to foreign directors: