Share warrant means a document issued by a public limited company in respect of fully paid share. The name of the bearer of the share warrant is not entitled in the register of members.
A share warrant is indeed a negotiable instrument. Following are the condition for issue of a share warrant:
01. Only public limited company limited by share may issue share warrant.
02. A public limited company must authorized by its articles for issuance share warrant.
03. The shares are fully paid up and stamped properly.
04. The total number of share is mentioned in the share warrant.
05. Annual report of the company includes a details description about the share warrant.
Dividend Warrant:
A dividend warrant is an instrument by which a company pays Dividend in the form of cash back to its shareholders from the profits it has made out of its business operations.
A dividend warrant normally contains the following information.
01. Name of the company
02. Mention Exercise price
03. Details of share holders
04. A unique warrant number
05. Bank details
06. Dividend warrants are turned into cash just like a cheque.
07. It also has expiry date. It is normally valid for six month just like a normal cheque.
08. It is very liquid (when received) and can be readily converted in to cash.