Every person whose name is entered in the register of members has a right to receive a share certificate in respect of those shares he owns in the company. Thus every Company must issue a share certificate within 60 days of allotment or lodgment of transfer. In case of default then every director, secretary or any officer who is party to the default is liable to a fine of Kshs.500,000.
legal effects of a share certificate
A share certificate under seal of company is prima facie evidence of the title of the member to the shares specified there in.
The issue of a share certificate makes the company liable in two ways:
Estoppels as to Title
If a Company authorizes the issue of a share certificate stating that the person named there in is the registered holder of certain shares it cannot afterwards allege that the person is not entitled to those shares
Company is not liable/bound by a certificate without the authority of the Board of Directors or where the certificate was forgery.
Estoppels as to payment
If the share certificate states that the shares are fully paid, the company is estopped as against a bona fide purchaser from alleging that the amount stated in the share certificate as having been paid not been paid.