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What is the evidentiary value of a share certificate duly issued by a company under section 46(1) of the Companies Act, 2013?

Question and options

What is the evidentiary value of a share certificate duly issued by a company under section 46(1) of the Companies Act, 2013?

  1. A negotiable instrument transferable by endorsement

  2. The instrument by which the shares are transferred

  3. Conclusive evidence of the holder's title to the shares

  4. Prima facie evidence of the holder's title to the shares

Answer and explanation

Correct answer: D - Prima facie evidence of the holder's title to the shares

Section 46(1) of the Companies Act, 2013 makes a share certificate, issued under the common seal, if any, of the company or signed by two directors or by a director and the company secretary where one is appointed, prima facie evidence of the title of the person named to the shares; it is not conclusive and can be rebutted. Shares are transferred by a proper instrument of transfer under section 56 or through a depository, not by the certificate itself.

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