What is a share certificate?
Incorporation Services Limited provides an expert
service for all your company formation and company law requirements, including
advice about different classes of shares. We supply sets of registers containing
share certificates and books of share certificates.
A share certificate is a certificate issued by a company certifying that on
the date the certificate is issued a certain person is the registered owner
of shares in the company.
The key information contained in the certificate is:
- the name and address of the shareholder
- the number of shares held
- the class of shares
- the amount paid (or treated as paid) on those shares
Unless the terms of issue or the articles provide to the contrary, the company
must issue a share certificate within two months of the issue or transfer of
any shares (CA 1985, sec185).
A share certificate is prima facie evidence (in Scotland 'sufficient evidence
unless the contrary is shown') of the member's title to the shares: CA 1985,
sec186).
At common law a company may be stopped from denying statements in a share certificate
against someone who has relied on the statement. Full consideration of this
area is beyond the scope of this database.
Most companies will require the share certificate to be produced when a request is made to transfer shares. Duplicate certificates may be made available, but usually on receipt of a statement of the facts and an indemnity against any liability incurred by the company.
The usual practice is for a company to issue just one certificate in respect of all the shares issued or transferred at a particular time, but a shareholder may request split certificates.
The provisions of Table A relating to share certificates are:
6. Every member, upon becoming the holder of any shares, shall be entitled without
payment to one certificate for all the shares of each class held by him (and,
upon transferring a part of his holding of shares in any class, to a certificate
for the balance of such holding) or several certificates each for one or more
of his shares upon payment for every certificate after the first of such reasonable
sum as the directors may determine. Every certificate shall be sealed with the
seal and shall specify the number, class and distinguishing numbers (if any)
of the shares to which it relates and the amount or respective amounts paid
up thereon. The company shall not be bound to issue more than one certificate
for shares held jointly by several persons and delivery of a certificate to
one joint holder shall be a sufficient delivery to all of them.
7. If a share certificate is defaced, worn-out, lost or destroyed, it may be
renewed on such terms (if any) as to evidence and indemnity and payment of the
expenses reasonably incurred by the company in investigating evidence as the
directors may determine but otherwise free of charge, and (in the case of defacement
or wearing out) on delivery up of the old certificate.
Incorporation Services Limited provides an expert
service for all your company formation and company law requirements, including
advice about different classes of shares.
Related topics
|
