Share certificates generally fall into two main types — Equity Share Certificates and Preference Share Certificates. Both represent ownership in a company, but each provides different rights. At FilingPoint, we help companies issue legally compliant share certificates quickly and professionally.
Share certificates act as the official proof of share ownership. Equity Share Certificates are the most common and provide voting rights, profit participation, and long-term ownership benefits. Preference Share Certificates, on the other hand, offer priority in dividends and repayment but usually do not carry voting rights. Understanding the difference helps companies maintain clean compliance and avoid future disputes.
Equity Share Certificates are issued to regular shareholders who contribute capital and participate in the company’s growth. These shareholders receive dividends based on company performance and enjoy full voting rights in important decisions. For growing startups and private limited companies, equity shares form the core ownership structure.
Preference Share Certificates are provided to investors who prefer fixed returns and priority rights. They receive dividends before equity shareholders and have priority during liquidation. However, they typically do not participate in voting, making them ideal for investors seeking stable returns without management involvement.
Here’s a simple checklist to understand the two types clearly:
• Equity Share Certificate: Voting rights, profit participation, ownership control
• Preference Share Certificate: Priority in dividend, priority in repayment, limited or no voting rights
• Both types must be issued within the legal time frame as per company law
• Proper entries must be updated in the Register of Members
• Certificates should include shareholder details, number of shares, distinctive numbers, and authorized signatories
• Companies must maintain accurate board approvals and records while issuing both types
Related Questions:
❓ Is a share certificate proof of ownership?
👉 Yes, it is the primary legal proof of shareholding under company law.
❓ Can a private limited company issue a share certificate?
👉 Yes, all private limited companies must issue share certificates to their shareholders after allotment.
❓ Do share certificates expire?
👉 No, they do not expire unless the company restructures or updates records.
For smooth, compliant, and stress-free share certificate management, choose FilingPoint — your trusted partner for company documentation and compliance.
Introduction Without these certificates, you’re not a legal owner of the company.That’s the danger of not having a valid share certificate—your ownership, rights, and dividends could vanish in a dispute. A share certificate isn’t just paper; it’s your legal armor that protects your investment, voting rights, and control in your …
