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What is a Share Warrant?


Updated: Category: Share Market
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Share Warrant; Meaning of Share Warrant; Contents of Share Warrant; Conditions for issue of Share Warrant



Meaning: A share warrant is a bearer document of title to shares and can be issued only by public limited companies and that to against fully paid up shares only.

A share warrant cannot be issued by a private company, because the share warrant states that its bearer is entitled to a number of shares mentioned there in. It is a negotiable document and is easily transferable by mere delivery to another person. The holder of the share warrant is entitled to receive dividend as decided by the company.

A share warrant is accompanied by attached coupons for the payment of future dividends.

There are three parts of a share warrant:
(1) The counter foil.
(2) Share Warrant proper.
(3) The dividend coupons.

Conditions for the issue of a share warrant:

(1) Only public limited companies: Share warrant can be issued by the public limited companies. It cannot be issued by private companies.

(2) Against share certificate of fully paid up shares: A share warrant is only issued against share certificate of fully paid up shares.

(3) Provision in the Articles: There must be a provision in the Articles of Association regarding the issue of share warrant. If there is a provision, the company can issue a share warrant. If there is no provision in the Articles, the company cannot issue a share warrant.

(4) Permission of the Central Government: Prior permission from the Central Government is necessary for the issue of share warrant.

(5) Share warrant not issued originally: Share warrant are not issued originally at the time of initial issue.

(6) AT the request of the share holder: A share warrant is issued at the request of the Shareholders / member and not by the company at its own initiative.

So, these were the conditions for the issue of a share warrant.

Thank you.


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Responses to "What is a Share Warrant?"
Guest Author: Himansu sahoo   01 Jul 2015
Is share warrant easily transferable, it means those person shows the share warrant they have entitle to dividend. And share warrant are issued at fare value or market value.


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