Surrender and Cancellation of Bearer Shares
Bearer shares have now been abolished and it is prohibited to issue new bearer shares.
What are Bearer Shares?
Bearer shares are unregistered shares that are owned by whoever physically holds the share warrant to them. These shares can be held anonymously as no one is entered in the company’s register of members. The shares are transferred by delivery of a warrant representing the shares. Bearer shares are considered to enable the concealment of persons exercising significant control over a company and go against corporate transparency. For all these reasons the Small Business, Enterprise and Employment Act 2015 (SBEE), instigated a process of abolishing bearer shares by their surrender and subsequent cancellation by the relevant company.
When were bearer shares cancelled?
The time period for the surrender and cancellation of bearer shares under the SBEE ran from 26th May 2015 until 26th June 2016. The SBEE set out a comprehensive process for their surrender and cancellation, including notifying Companies House on form SH19. The time period for this process has now long passed and we have therefore removed our template content on the cancellation process from our Corporate folder. The relevant forms have also been removed from Companies House (as of September 2017).
What if I or my company still have bearer shares that need cancelling?
In the unlikely event that companies may still know or suspect that they may have bearer shares in issue, these shares will no longer be valid. However please note that the SBEE imposes criminal sanctions for both the company and its officers in default for not complying with the set statutory provisions set out in Schedule 4 of the SBEE regarding the process for abolishing bearer shares.
Companies should consider seeking legal advice in the unlikely event that bearer shares or the consequences of their abolition are a cause for concern.