Information regarding Share Certificate of Housing Societies
Information regarding Share Certificate of Housing Societies
- Share Certificate is one of the most important documents issued to the members of the Co-operative housing society
- As per Model Bye-laws# 9(a): A 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 there on, shall be issued by the Society to every Member for the shares subscribed by him, within a period of six months of the allotment of the shares.
- In Maharashtra, societies are governed by Maharashtra Cooperative Societies Act. This Act provides the rules and regulations governing Cooperative Housing Societies also.
- Total Authorized Share Capital of a Co operative Society is fixed by Registrar of Co op Societies at the time of registering the Society. This share capital is divided into shares of Rs 50/- each.
- After the 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.
- The paid up capital of the society need not always be equal to the authorized capital as the latter is kept higher, for future eventualities. Thus, a member owns 10 shares in the society, for which the society issues a share certificate, giving details of the name of member, the premises no., share certificate no., and the distinctive nos. of the shares and the amount paid (Rs. 500).
- Thus, share certificate no. 1 will be for share nos. 1-5, share cert. no 2 for shares 6-10 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 on the basis of share certificate only.
- However, it is advisable to issue a consolidated single share certificate to members, by taking back the original certificate – to avoid its misuse by members.
- In this case the share certificate shall reflect 2 parts – one, information about the original share certificate, old distinctive numbers etc, and two, the new additional 5 shares issued to him with the new series of distinctive numbers for these 5 shares.
- The Name & order of appearance on the Share Certificate will be exactly the same order as appearing on the Sale Agreement.
- No change in the share certificate shall be done without following due process of law including spelling mistakes in Sale agreement reflected similarly in Share certificate
- When the Share certificate is issued to Member, Society has to ensure there is not liability on the property in such a case the Share Certificate will be maintained at Society Office or the Financial Institute, which has lieu against the Property.
- In case of sale/transfer, Share Certificate shall be surrendered to Society office along with other forms & documents (Bye-laws 38(e)(i))
- After proper Society procedure & process is completed share certificate is transferred in 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.
- The share certificate has to be retained by the owner of the premises, as his membership is dependent on that.
Checklist for issuing Share Certificate to Original Member :
- Does Member Property clear of any lieu?
- In addition to request for 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 indemnify the Office bearers & Society ?
- Is the Member in possession of Original Sale Agreement while collecting the Share certificate?
- Is the Share certificate collected by Member in person?
- If the member is claiming share certificate after clearing all Mortgage or loan or any liability. Has he /she submitted Loan Clearance certificate in original or Certified copy of same?
IF THE ANSWER TO ANY OF THE ABOVE IS NO THEN SHARE CERTIFICATE SHALL NOT BE HANDED OVER TO MEMBER. IF ANSWER TO ALL THE ABOVE POINTS IS YES THEN SHARE CERTIFICATE CAN BE HANDED OVER TO MEMBER ONLY OR ANY OTHER PERSON NOMINATED BY MEMBER THROUGH ISSUING OF POWER OF ATTORNEY FOR THE SAME.
Checklist for issuing Share Certificate to Member due to resale of property:
- Has the Incoming new member completed all Society Transfer formalities?
- Has the incoming members name entered in society record & Share certificate?
- Does incoming member have any lieu against the Property?
- In addition to request for Share certificate has the incoming 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 indemnify the Office bearers & Society ?
- Is the incoming member in possession of Sale Agreement while collecting the Share certificate?
- Is the Share certificate collected by incoming member in person
- If the incoming member is claiming share certificate after clearing all Mortgage or loan or any liability. Has he /she submitted Loan Clearance certificate in original or Certified copy of same?
IF THE ANSWER TO ANY OF THE ABOVE IS NO THEN SHARE CERTIFICATE SHALL NOT BE HANDED OVER TO MEMBER.IF ANSWER TO ALL THE ABOVE POINTS IS YES THEN SHARE CERTIFICATE CAN BE HANDED OVER TO MEMBER ONLY OR ANY OTHER PERSON NOMINATED BY MEMBER THROUGH ISSUING OF POWER OF ATTORNEY FOR THE SAME.
As per new Bye-laws 2014, each of the premises, irrespective of the area or type of the premises, should be issued ten shares of Rs 50 each, in one share certificate.
When share certificate is issued, signature of the share holder or first share holder (if share is held by more than one person, by virtue of buying the flat by joint agreement) is taken on the back of the share certificate's counterfoil, with date.
When share is issued for the first time as above, its entries are also made for the first time, in the I-form and J-form (books) of the society, in the name/s of original buyer/s of the flat.
When such original buyer sells the flat, subsequent buyer's name is written on the back of share certificate, and such change is entered in the I-form and J-form of the society.
Every time, when sale of flat takes place, there is no change made in the share certificate's counter foil, or new share certificate is not issued in place of old certificate, but its entry is made only on the back side of the original share certificate, and its changed new entries are made in the I-form and J-form of the society.
In all cases of transfer of flat, name of the original flat holder continues to remain present on front side of the share certificate, at all the times.
When the flat is sold, share certificate is transferred in the name of the buyer, after passing the transfer in the monthly meeting of the Managing Committee, and not in the AGM of the society.
AGM of the society just conforms the name change of the flat name by the committee, during the period between last AGM and present AGM of the society.
It is just a formality to know the members of the society, who are the new members of the society, by replacing the existing members, either by sale or by gift or by death.
As you say, there is no cashbook folio for the transfer of the society's share for the buyer of the flat.
For transfer of a new flat in the name of the new buyer, buyer of the flat has to fill in and submit forms, and fees as below:
(1) Appendix-2,
(2) Appendix-3 (on Rs200 Non-judicial stamp paper),
(3) Appendix-25(2) (on Rs200 Non-Judicial stamp paper),
(4) Xerox copy of the Index-2 of your sale deed,
(5) Rs500 cheque for share certificate and
(6) Rs100 cheque towards entrance fee.
Within 30 days of submission of above documents along with the fees as stated above, by the original buyer/s to the society, original buyer will be issued original share certificate in the name of the buyer/s, and an intimation of the membership letter in form Appendix-26.
A resale buyer of the flat, has to fill in and submit to the society following forms:
(1) (by seller) Appendix-20(1) and Appendix-21
(2) (by buyer) Appendix-20(2) and Appendix-23
(3) (by buyer) Appendix-3 (on Rs200 Non-judicial stamp paper),
(4) (by buyer, jointly with the seller) Appendix-25(1) (on Rs200 Non-Judicial stamp paper),
(5) Xerox copy of the Index-2 of buyer's sale deed,
(6) Rs100 cheque towards entrance fee,
(7) Rs25,000 cheque for transfer premium. and
(8) Original share certificate, which is in seller's name, to transfer it in the buyer's name by Society.
Within 30 days of submission of above documents along with the fees by the resale flat buyer/s to the society, resale buyer will be issued the share certificate (which is given to the society by the buyer) transferred in the name of the buyer/s, duly endorsed on the backside of the share certificate by the society along with an intimation of membership letter in form Appendix-26.
IMPORTANT NOTE:
Whether for getting the new share certificate or for getting transferred share certificate, if buyer of the flat or first named buyer of the flat has no independent income source, then intended member has to submit an undertaking on Rs200 Non-Judicial Stamp Paper, in the from In Appendix-4, from an earning member, who is ready to bear the cost of Society's dues for the flat to be transferred in the name of the non-earning member.
Please note: All form's Appendix numbers, are as given in Appendices of the Bye-laws of year 2014.
When share certificate is issued, signature of the share holder or first share holder (if share is held by more than one person, by virtue of buying the flat by joint agreement) is taken on the back of the share certificate's counterfoil, with date.
When share is issued for the first time as above, its entries are also made for the first time, in the I-form and J-form (books) of the society, in the name/s of original buyer/s of the flat.
When such original buyer sells the flat, subsequent buyer's name is written on the back of share certificate, and such change is entered in the I-form and J-form of the society.
Every time, when sale of flat takes place, there is no change made in the share certificate's counter foil, or new share certificate is not issued in place of old certificate, but its entry is made only on the back side of the original share certificate, and its changed new entries are made in the I-form and J-form of the society.
In all cases of transfer of flat, name of the original flat holder continues to remain present on front side of the share certificate, at all the times.
When the flat is sold, share certificate is transferred in the name of the buyer, after passing the transfer in the monthly meeting of the Managing Committee, and not in the AGM of the society.
AGM of the society just conforms the name change of the flat name by the committee, during the period between last AGM and present AGM of the society.
It is just a formality to know the members of the society, who are the new members of the society, by replacing the existing members, either by sale or by gift or by death.
As you say, there is no cashbook folio for the transfer of the society's share for the buyer of the flat.
For transfer of a new flat in the name of the new buyer, buyer of the flat has to fill in and submit forms, and fees as below:
(1) Appendix-2,
(2) Appendix-3 (on Rs200 Non-judicial stamp paper),
(3) Appendix-25(2) (on Rs200 Non-Judicial stamp paper),
(4) Xerox copy of the Index-2 of your sale deed,
(5) Rs500 cheque for share certificate and
(6) Rs100 cheque towards entrance fee.
Within 30 days of submission of above documents along with the fees as stated above, by the original buyer/s to the society, original buyer will be issued original share certificate in the name of the buyer/s, and an intimation of the membership letter in form Appendix-26.
A resale buyer of the flat, has to fill in and submit to the society following forms:
(1) (by seller) Appendix-20(1) and Appendix-21
(2) (by buyer) Appendix-20(2) and Appendix-23
(3) (by buyer) Appendix-3 (on Rs200 Non-judicial stamp paper),
(4) (by buyer, jointly with the seller) Appendix-25(1) (on Rs200 Non-Judicial stamp paper),
(5) Xerox copy of the Index-2 of buyer's sale deed,
(6) Rs100 cheque towards entrance fee,
(7) Rs25,000 cheque for transfer premium. and
(8) Original share certificate, which is in seller's name, to transfer it in the buyer's name by Society.
Within 30 days of submission of above documents along with the fees by the resale flat buyer/s to the society, resale buyer will be issued the share certificate (which is given to the society by the buyer) transferred in the name of the buyer/s, duly endorsed on the backside of the share certificate by the society along with an intimation of membership letter in form Appendix-26.
IMPORTANT NOTE:
Whether for getting the new share certificate or for getting transferred share certificate, if buyer of the flat or first named buyer of the flat has no independent income source, then intended member has to submit an undertaking on Rs200 Non-Judicial Stamp Paper, in the from In Appendix-4, from an earning member, who is ready to bear the cost of Society's dues for the flat to be transferred in the name of the non-earning member.
Please note: All form's Appendix numbers, are as given in Appendices of the Bye-laws of year 2014.
Dayanand J. Nene
[Political Activist and Analyst]
Bharatiya Janata Party
Consumer Protection Service Council
Alert Citizens Forum of India
#8104968725
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