Share Certificates

Your company can issue shares of stock up to the amount authorised by its Memorandum of Association. Once issued, shares represent ownership interest in the company.

Holders of shares enjoy certain rights defined in the Articles of Association, amongst these is the right to a proportionate part of profits, the right to vote for directors or the right to inspect the books of the company.

A share certificate or stock certificate is a written instrument evidencing the legal title to shares in the company.

A typical share certificate contains:

• Details identifying the company that issued it . The name, company number and date of formation.
• The authorised capital of the company.
• The number of shares represented by the certificate.
• The class of the shares represented by the certificate including any special conditions, preferences or restrictions pertinent to the particular class.
• Details identifying the owner of the shares represented by the certificate.

Bearer shares

Where legislation permits, share certificates may be issued to bearer. This means that the details identifying the owner of shares are omitted both on the certificate itself and in the company's share register. Bearer share certificates allow an easy transfer of title. They are negotiable without endorsement. The person having physical possession of a bearer share certificate is assumed to be the legal owner.

In contrast, registered share certificates can only be transferred by endorsement and the relevant entry made in the company's share register. A new certificate is issued to replace the endorsed certificate.