Share Certificate in Housing Society Maharashtra

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Share Certificate Format | Share Certificate Format for Housing Society | What is share capital | Share Certificate in Co-op Housing Society

We are getting many queries related to the share certificate and share certificate format as given below some of the queries : 

1. What is share capital in a housing society?

2. What is a share certificate?

3. Who and how to decide the amount / authorized share capital?

4. Timeline to distribute the share certificate? When can I get the share certificate from society?

5. Where is this share capital deposited?

6. Can we use share money for regular expenses?

7. How to know every member's share capital amount?

8. How to issue a share certificate?

9. Things to be checked before issuing a share certificate?

10. Why do you need the share certificate?

11. How to Issue a duplicate share certificate?

12. Share Certificate format?

Like above many more query coming to us in our WhatsApp group, here we will try to explain everything.

1. What is Share Capital in housing society?

While incorporating a cooperative society, and planning to raise money, words like ‘share capital’ come into the picture. Starting a business and raising funds requires an understanding of what these terms are and why they are important for co-operative. 
Simply we can say, that share capital is the money a business raises in exchange for ownership in the company. For a cooperative housing society, this usually refers to the money an individual pays to become a member.

2. What is a Share Certificate?

The share certificate is a legal certificate given by a cooperative housing society that a particular member is the registered owner of shares in the cooperative housing society. Bye-Laws state that, “Share Certificate, prescribed in bye-laws, bearing distinctive number and indicating the name of the member, the number of shares issued and the value paid thereon, shall be issued by the society to every member for the shares subscribed by him, within six months of the allotment of the shares.
In other words, we can say that it receives acknowledgment from members, who have paid a share capital amount of Rs 500 while registering the cooperative housing society.

Some important points about sharing certificate

• After amendment to the byelaws in 2014, in cooperative housing societies in Maharashtra, each member has to pay for 10 shares, which is the limit of his share in the liability of the Society.
• Paid up capital of the society will not always be equal to the authorized capital as the latter is kept higher, for future eventualities. 
• A member will have 10 shares in the society, for which the member has paid to society while society formation, later society will issue a share certificate for same, giving details of the flat owner (Member name as per sale agreement), the flat no., share certificate no., and the distinctive nos. of the shares and the amount paid Rs. 500.
• Share certificate no. 1 will be given to shares nos. 1-10, likewise share certificate no 2 for shares 11-20, etc. This certificate is the only proof of the ownership of the premises by the member, as in Maharashtra, all premises are owned by the Societies and the flats are allotted to members based on share certificate only.
• Owner Name & order of appearance on the Share Certificate will be in the same order as appearing on the Sale Agreement.
• Society can not make any changes to the share certificate, if spelling mistakes in the Sale agreement same will be reflected in the Share certificate.
• In case of sale/transfer, the Share Certificate shall be surrendered to the Society along with other forms & documents (Bye-laws 38(e)(i)), after proper procedure & process are completed, the share certificate is transferred in the name of the buyer from the seller and thereafter the seller has no right in the premises, as he ceases to be a member of the Society.

3. Who and how to decide the amount / authorized share capital?

” The Registrar decides at the time of the society’s registration the total authorized capital which is divided into Rs. 50 per share and share certificates are thereof distributed to the members. The member is issued 10 shares (worth Rs 500) as the total share capital need not be the same as the actual number of shares issued.

4. Timeline to distribute the share certificate? When can I get the share certificate from society?

Model bye-laws say, “Share Certificate, prescribed in bye-laws, bearing distinctive number and indicating the name of the member, the number of shares issued and the value paid thereon, shall be issued by the society to every member for the shares subscribed by him, within six months of the allotment of the shares.

5. Where is this share capital deposited?

Share capital deposited in district co-operative bank by builder/promoter while registering the co-operative housing society.

6. Can we use share money for regular expenses?

No

7. How to know every member's share capital amount?

You need to read your society by law. Authorized Share Capital Bye - Law 8

8. How to issue a share certificate?

Society should check all documents and dues before issuing the share certificate. Many societies don't do any documentation not prepare a share register and issue share certificates blindly like not checking share certificate number is distinctive etc. So prepare a share register, "I" Form register & "J" Form register and do entries in the required register first then issue a share certificate. 

9. Things to be checked before issuing a share certificate?

Checklist for issuing Share Certificate to Original Member :

a) Member has submitted the sale agreement copy?

b) Does the Member have cleared all dues?

c) In addition to the request for a Share certificate has the Member Submitted in writing that he /she does not have any Mortgage or loan or any liability against the property and if he/she does then he/she indemnifies the Office bearers & Society.

d) Member should show the Original Sale Agreement while collecting the Share certificate if no loan against the flat.

e) Share certificate should be given to Member(Flat Owner) only.

f) If the member is claiming a share certificate after clearing all Mortgage or loans or any liability. Has he /she submitted a Loan Clearance certificate in original or Certified copy of same?

10. Why do you need the share certificate?

Like your sale deed is proof of the ownership of property, in the same way, a share certificate is legal proof that you are the rightful owner of the co-operative housing society’s shares. The managing committee must issue share certificates after due diligence. 

11. How to Issue a duplicate share certificate?

First of all society committee should issue a share certificate in the best quality glossy paper. So it can keep longer time without any soiling, bend or burst.

We advise you to keep the Share Certificate in a safe place. Because getting duplicates is not an easy process. If your share certificate is destroyed, lost, soiled, misplaced, or stolen, you need to approach the Housing Society committee to issue a duplicate share certificate.

• First, you need to file an FIR at the local police station and take a copy of the FIR acknowledged by the Police.
• You need to write an application to the housing society informing them about the misplaced or lost share certificate and further request a duplicate one,
• And, attach the acknowledged copy of the FIR with the application.
• You need to submit an indemnity bond of Rs 200 to the society, indemnifying the society of all costs/ results of issuing a duplicate share certificate.
• Attach the duly notarized indemnity bond with the application made to the society.
• On receiving the application the Secretary shall call a Managing committee meeting to get its approval for the grant of a duplicate share certificate. In the same meeting, the society examines the application and attached documents and approves the request for a duplicate share certificate if all papers are right.
• The society shall issue a public notice in two local newspapers and also the same affix on the society’s notice board to invite objections, if any.
• The society will wait for 15 days for any objections after putting out the notice on the society’s notice board and the advertisement in the newspapers.
• If no objections are raised, the society shall issue a duplicate share certificate to the member. The cost of publishing notices in newspapers has to be borne by the member.