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Surrender of Shares
Mohammed Julfekar Haider
Surrendering shares; Procedures regarding surrender of shares.
It means a voluntary return of shares by a member to the company. here, the member take initiative and voluntarily returns shares with a request to cancel his membership.
The company accepts surrender of partly paid up shares only.
Procedure regarding Surrender of Shares:
(1) Provision in the Articles:
There must be a provision in the Articles of Association regarding surrender of shares. If there is a provision, the company will go ahead regarding surrender of shares. If there is no provision the company will not go ahead regarding surrender of shares.
(2) Confirmation that the shares are partly paid up:
The secretary will then check in the Register of members, if the shares are partly paid up or fully paid up as the company accepts partly paid up shares only. He has also to check, if the shares are liable for forfeiture due to non payment of call money.
(3) Approval from the Board:
A meeting of the Board of Directors is called to approve such surrender of shares. In this meeting, the secretary will put forth to the Board of Directors the request for surrender of shares. The Board of Directors will then discuss regarding surrender of shares and finally will pass a resolution to that effect.
(4) Intimation to the share holders:
Once the resolution has been passed regarding surrender of shares by the Board of Directors, the secretary will inform the concerned share holders to come and hand over the shares back to the company. The shareholder has also to hand over the share certificate to the company.
(5) Removal of names from the Register of members:
Once the share holder has surrendered his shares, the secretary will remove his name from the Register of members, as now, he is no longer a member of the company.
These were the procedures regarding surrender of shares
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