How to issue a share certificate in South Africa

What is a share certificate?

A share certificate is a document a company gives each shareholder as proof that they own a number of its shares. If a company has three shareholders, it issues at least three certificates, each with its own certificate number.

The certificate is evidence of ownership. The legal record of who owns what is the company's securities register, so the two must always agree.

Does CIPC issue share certificates?

No. CIPC registers the company and its directors, but it does not issue share certificates. When you register a Pty Ltd, the CIPC documents (such as the registration certificate and the Memorandum of Incorporation) do not show who the shareholders are. The company has to issue its own certificates.

This is why many owners discover they have no share certificate only when a bank or funder asks for one.

What must a share certificate show?

Section 51 of the Companies Act says a certificate for certificated shares must state on its face:

• The name of the company that issued the shares
• The name of the person the shares are issued to
• The number and class of shares
• Any restriction on transferring the shares

It must also be signed by two persons authorised by the company's board. In a small company that is normally the directors. If the company has only one director, the board can authorise a second person to sign.

In practice, certificates also show a certificate number, the shareholder's ID or passport number and address, and the date of issue, because these details must go into the securities register anyway.

What is the securities register?

Section 50 of the Companies Act requires every company to keep a securities register: a list of all shares issued, who holds them, the number and class, and the date of issue. It is kept with the company's records, and the details must match the certificates. Read more in our guide to the securities register.

How do I issue a share certificate?

1. Confirm how many shares the company has issued and to whom. A new company usually issues all its shares to the founders when it is registered.
2. Give each shareholding a certificate number (for example 1, 2, 3).
3. Prepare one certificate per shareholder with the details above.
4. Have two authorised people sign each certificate and fill in the date of issue.
5. Record each certificate in the securities register.
6. Give each shareholder their original and keep copies with the company records.

If the shareholders are not the same people as the directors, also check whether the company must file beneficial ownership information with CIPC. See the beneficial ownership section below.

Why does the bank ask for a share certificate?

Banks must know who owns and controls a company before they open or keep an account for it. The CIPC documents show the directors but not the shareholders, so the bank asks for share certificates or the securities register to see the owners. Funders, tender panels and auditors ask for the same reason.

Is a share certificate the same as beneficial ownership?

No. The share certificate and securities register are the company's own records of who holds its shares. Beneficial ownership is information about the people who ultimately own or control the company, and it must be filed with CIPC. Companies must keep it up to date and file changes with CIPC within 10 business days. The two should tell the same story.

How much does a share certificate cost?

There is no government fee, because the company issues the certificate itself. You can draw it up yourself, or have it prepared. At Uminathi, the share certificates, securities register and cover letter for all shareholders cost R450, generated instantly and emailed as a PDF once you pay. You can try it free first and see a watermarked preview.

Step by step

1. Confirm the shareholding. List each shareholder and the number and class of shares they hold.
2. Number the certificates. Give each shareholding its own certificate number.
3. Prepare the certificates. Show the company name, shareholder name, number and class of shares and any transfer restriction.
4. Sign them. Two people authorised by the board sign each certificate and add the date of issue.
5. Update the securities register. Record every certificate in the company's securities register.
6. Hand them over. Give each shareholder the original and keep copies with the company records.