Month: August 2022

Non-receipt of shares sent to transfer Non-receipt of corporate benefits Non-rectification of bad delivery by the broker Non-receipt of funds/securities on sale/purchase Introduction of fake, forged and stolen securities Non-rectification of company objections Contract notes not issued by the broker

All the corporate benefits like dividends, bonuses, rights, etc. announced by the company are given to those persons whose names appear in the register of members of the company as on the book-closure date or record announced by the company. It is therefore important for the buyer to register the ownership of the shares.

You have to ensure that the transfer deed is of recent date and not dated prior to the book closure date. Also, you have to ensure that any other particulars are accurately filled in as contained in the share certificate and if there are any corrections made for the information filled in by the seller, such corrections are properly authenticated by all sellers

After a sale is effected the share certificate along with a proper transfer deed and complete in all respects is sent to the company for transfer in the name of the buyer. A transfer is complete in the books of the company after the transfer is registered in the share transfer register maintained by the company

A deed of transfer is considered proper if it is:

(a) in the prescribed format (Form 117) 

(b) dated by the prescribed authority (e.g. Registrar of Companies) and its validity period has not expired 

(c) duly signed by or on behalf of the transferor and transferee and complete in all receipts.

An investor sends the certificate along with the transfer deed to the company for registration. In certain cases, the registration is rejected because of signature difference, if the shares are fake, forged, or stolen or if there’s is a court injunction preventing the transfer of the shares, etc. In such cases, the company returns the shares along with a letter, which is termed as an objection memo. All such cases are identified as company objections.

All bad deliveries will have to be reported to the clearing house by the buying broker.

The securities and the funds are paid out to the broker on the pay-out day.

If you have bought shares, you have to pay-in-funds to the broker in such a manner that the amount paid is realized before the funds pay-in-day. 

You have to deliver the securities to the broker immediately upon your getting the contract note for sale but in any case before the shares pay-in-day.