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BEARER SHARES ABOLISHED (UK)
Following implementation of amendments to the Companies Act 2006 by the Small Business, Enterprise and Employment Act 2015 (‘SBEE’), a company may no longer issue bearer shares. Traditionally, bearer shareholders’ details were not entered into the company's register of members and shares were transferred by delivering a warrant representing those shares. There are roughly 1,200 UK companies which currently have bearer shares in issue.From 26 May 2015, companies can no longer issue any new bearer shares and existing bearer shareholders will have until 26 December 2015 to surrender them for conversion into registered shares. Companies must give notice by 26 June 2015 to bearer shareholders of the right to convert them. Notice must be published on the company's website (if applicable) and in the London Gazette. If any bearer shares are not surrendered for conversion, a company will be required to apply to court to cancel them.A company’s failure to surrender the shares for conversion will lead to the company having to pay the Court the amount of share capital (nominal and any premium) paid up on the bearer shares to be cancelled, plus any accrued dividends. Monies paid into Court can be claimed for up to three years following cancellation, but only where the failure to exercise the right of surrender was due to "exceptional circumstances". Unclaimed monies will go to the Government.Companies which make provision for bearer shares in their articles of association will be able to remove these provisions without the shareholders passing a special resolution. A copy of the amended articles would have to be filed at Companies House.To access a copy of the Act click here.To read the Government's provisional implementation timetable click here.For more information, contact Hewitsons (Cambridge) Venetia Phipps on 01223 316511 or click here to email Venetia.