FOLIO NUMBER

A folio number is a number of the page of the shareholder’s register on which details of a shareholder is recorded.

A folio number once allocated never changes until a person remains a shareholder in the company. It is also written as distinctive numbers of shares on the share certificates.

For an investor, folio number is his identity to the company. Three rules have mention of “folio number” and two other rules refer to “folio”.

The process of allocating folio numbers is the same in all case whether it is a public company or a private company, limited or unlimited, public sector or private company.

The allocation of folio number is an unceremonious task silently happening at the time of incorporation. Yes, indeed.

Initial folio numbers are allocated in the same sequence in which a subscriber to the memorandum of association (MOA) signed or subscribed to take initial share capital at the time of incorporation. These subscribers are a promoter or founder shareholders of the company. Members’ or shareholders’ register should be prepared after obtaining incorporation certificate for a company. It helps in issuance of share certificates to the shareholders.

In case of further issue of shares, new shareholders receive next folio numbers in the sequence in which they are listed on the resolution allotting shares to them.

Related provisions.

Rule 6 of the Companies (Share Capital and debentures) Rules, 2014]

Every shareholders’ register maintained shall include an index of the names entered in the respective registers and the index shall, in respect of each folio, contain sufficient indication to enable the entries relating to that folio in the register to be readily found.

Other rules having reference to folio or folio numbers are:

  • Rule 20 of the Companies (Share Capital and debentures) Rules, 2014 – Voting Through Electronic Means.
  • Rule 21  of the Companies (Share Capital and debentures) Rules, 2014 – The manner in which the Chairman of Meeting    Shall Get the Poll Process Scrutinized and Report Thereon.
  • Rule 22 of the Companies (Share Capital and debentures) Rules, 2014] – Procedure to be Followed for Conducting Business Through Postal Ballot
  • Rule 7 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 – Small Shareholders’ Director

Every certificate of share or shares shall be in Form 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.

A folio contains details of all shares registered in the name of the shareholder. It records all shares allotted, purchased and sold by the shareholder. At the end of the folio, the final figure of shares held by the shareholder shows the voting power of the shareholder mentioned on the folio.