Share Certificate for a private company limited by shares
Unlike a company limited by guarantee, a company limited by shares is under a duty under the Companies Act 2006 to issue share certificates to shareholders within two months after the allotment of any of its shares, or of the date on which a transfer is lodged for registration.
The Model Articles (article 24) include provisions relating to the issue of share certificates.
What does Share Certificate do?
It provides a share certificate that evidences title to the shares and confirms that the named person is a member of the company in respect of the number and class of shares stated in the certificate.
What does Share Certificate cover?
- The number of shares and the class of shares to which the certificate relates.
- The nominal value of the relevant shares.
- The name and address of the member.
The company’s articles may require further information to be included in the certificate. For example, where shares are only partly paid, distinguishing numbers may need to be given to the shares and the amount paid up on the shares must be stated.
When should you use Share Certificate?
- You have allotted shares and need to issue the share certificate within two months after the allotment.
- A transfer has been lodged for registration and you need to issue the share certificate within two months of that date.
- You want a clear, properly executed certificate showing the member’s shareholding by number and class.
What else you may need
The company’s articles must be consulted to determine how the certificate should be signed. Under the Companies Act 2006, share certificates can be executed:
- By the signatures of two directors.
- By the signatures of a director and the company secretary.
- By the signature of one director in the presence of a witness.
A share certificate may also be executed by affixing the company’s seal in the presence of two directors, or a director and the company secretary (who must also sign their names in both cases).
If a share certificate is defaced, worn out or mislaid, it may be replaced. Normally the member would be asked to pay a small fee and sign an indemnity.
Helpful resources
If you are using the Model Articles, you may wish to review the article dealing with share certificates.
Share Certificate for a private company limited by shares is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.