What is the Difference Between Share Certificate and Share Warrant?

The main differences between a share certificate and a share warrant are as follows:

Meaning: A share certificate is a legal document that indicates the possession of the shareholder on the specified number of shares, while a share warrant is a document that indicates the bearer is entitled to the specified number of shares in the future.
Issue: Share certificates can be issued by both public and private companies, whereas share warrants are issued only by public limited companies.
Compulsory: Issuing a share certificate is compulsory, while issuing a share warrant is not.
Time of Issue: A share certificate should be issued within three months after the allotment of shares, while there is no such time limit specified for the issue of a share warrant.
Nature of Shares: A share certificate can be issued against partly or fully paid-up shares, while a share warrant is only issued against fully paid-up shares.
Sanction of Government: Share certificates do not require approval from the Central Government, while share warrants do.
Provision in the Articles of Association: A share certificate does not require any provision in the Articles of Association, while a share warrant does.
Stamp Duty: The stamp duty on issuing a share certificate is nominal, while a heavy stamp duty is to be paid on the issue of a share warrant.
Negotiability: A share certificate is not a negotiable (transferable) document, while a share warrant is a negotiable document.
Rights: A member in possession of a share certificate has the right to vote and participate in meetings, while a share warrant holder does not have these rights.

In summary, a share certificate is proof of current ownership and represents the shareholder's stake in the company, while a share warrant grants the right to purchase shares at a predetermined price in the future.

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What is the Difference Between Share Certificate and Share Warrant?

Comparative Table: Share Certificate vs Share Warrant

Here is a table highlighting the differences between a share certificate and a share warrant:

Feature	Share Certificate	Share Warrant
Meaning	A legal document indicating the possession of the shareholder on the specified number of shares.	A document indicating that the bearer of the share warrant is entitled to the specified number of shares.
Compulsory	Yes, it is compulsory for every company limited by shares.	No, it is not compulsory.
Issued by	Both public and private companies can issue share certificates.	Only public limited companies can issue share warrants.
Nature of Shares	Issued against partly or fully paid-up shares.	Issued only on fully paid-up shares.
Time of Issue	A company must issue a share certificate within three months after the allotment of shares.	Share warrants can be issued after the collection of the shareholder's payment if the shareholder wishes.
Proof of Ownership	Serves as proof of current ownership for shareholders.	Grants the right to purchase shares in the future.
Voting and Meeting Participation	A member in possession of a share certificate has the right to vote and participate in meetings.	The bearer of a share warrant is not necessarily a member of the company.
Stamp Duty	Nominal stamp duty is paid on the issuance of a share certificate.	Heavy stamp duty is paid on the issuance of a share warrant.
Transferability	Share certificates are not negotiable (transferable) documents.	Share warrants are negotiable documents, and anyone holding the instrument can get the ownership of shares.
Government Sanction	Central Government's sanction is not required to issue share certificates.	Central Government's sanction is required to issue share warrants.

Guilherme Mazui

Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.