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BUSINESS TIPS

Do I need to issue a share certificate?

A share certificate is evidence of entitlement to the shares indicated on the certificate. Companies are required to issue share certificates to shareholders within two months after an issue of shares or the date when the documents necessary to affect a transfer have been received by the company, unless the company holds its shares within the CREST system.

When the name or address of a shareholder is changed, a new, amended share certificate should be issued to the shareholder. This is on condition that an acceptable proof of change of name or address is presented to the company. In addition to this, where a share transfer takes place the old shareholder must surrender their share certificate and a new certificate should be created displaying the correct details of the new shareholder.

It is important that a share certificate has the correct details and information on it. It should contain the following basic information:

  • a unique serial number
  • the name and registered number of the company
  • the name of the registered holder
  • the number and description of the shares to which the certificate relates (including the extent to which the shares are paid up)
  • the date of the certificate.

The company cannot deny the title of the person named in the certificate of the shares specified in it. In addition to this, a company cannot deny that shares are fully paid if this is what is stated on the holder’s share certificate. However, if a certificate is executed without the company’s authority it is void and therefore is not binding by the company.

Wisteria can help your business to prepare and issue share certificates. If you have any queries about issuing share certificates, please contact us on 020 8429 9245.