Initially A company requires capital to start a business.

Such capital is infused by first subscribers to MOA, who can be an individual or a body corporate, by subscribing the shares of the company.

A subscriber is a first shareholder of the company and the member of the company as per section 2(55) of the Companies Act, 2013. Each share has a nominal value which is to be paid by such subscriber; the subscription money is to be deposited in the bank account of the company.

As per section 46(1) of the Act, a certificate, issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares. Effective from 29th May 2015, i.e. on or after the commencement of the Companies (Amendment) Act, 2015, the requirement of affixing common seal on the certificate of share is made optional for companies which do not have a common seal as per their articles.  

As per Section 56 (4) (a) the Companies Act, 2013, a Company shall issue Share Certificates to the subscribers of Memorandum within 2 months from the date of Incorporation. But it is to be ensured that Share subscription money is received before issuing share certificates.   Therefore, share certificates should be issued only after the receipt of money. (deemed to be received in case of 1st subscribers)

Every certificate of share or shares shall be in Form No. SH-1 or as near thereto as possible and shall specify the name(s) of the person(s) in whose favour the certificate is issued, the shares to which it relates and the amount paid-up thereon.