Government calls time on bearer shares
Last year, the government decided action was needed to restore the public’s confidence in capitalism. It issued a ‘Transparency and Trust’ discussion paper and has now collated the results of that consultation into a formal response setting out the steps that it believes will heal the rift between businesses and the wider public. One of the proposals will see bearer shares become a thing of the past.
Most companies have registered shares, with the holder of those shares being named both in the company’s register of members and on the relevant share certificate.
With bearer shares, however, no name appears in the company’s register in respect of those shares or on the legal document certifying the existence of those shares. The bearer shares are owned by whoever holds (or ‘bears’) the certificate for those shares. Ownership of bearer shares is transferred by physically handing the relevant share certificate from one person to another and there is no record, either in the company’s registers or anywhere else, of that transfer having taken place…
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