Bearer shares or 'share warrants' as they are termed in the Companies Act 1985, are shares which are not represented by a share certificate. Instead they are represented by a warrant which allows the holder – the bearer – to claim all ownership rights which attach to the shares.

A UK company may only issues shares to bearer if:

• it has authority in its articles to do so;
  
  
• the shares are fully paid; and
  
  
• the shares have first been issued to a registered holder whose name is entered into the register of members.

Once shares have been placed in bearer share warrants they may be transferred by delivery and the transfer does not need to be registered with the company.

One consequence of this is that a company which places its entire issued share capital in bearer share warrants will not know whether it will have to comply with certain rules which relate to companies which only have one member (because it will not know whether one or more persons are holding the bearer share warrants).

There may also be practical difficulties in administering companies when bearer share warrants are issued. In particular if there are no registered members it may be difficult to hold the annual general meeting or any extraordinary general meeting which may be necessary to deal with the company's affairs.

For these reasons it is common to find that at least one share (perhaps of a different class) is held in registered form.

Our services to provide the company with power to issue bearer shares include:

• Extraction of current memorandum and articles from the company’s public file
  
  
• Drafting of a suitably revised memorandum and articles to enable the company to carry on business as a general commercial company and to convert a class of shares into bearer form
  
  
• Provision of the documents required to re-designation the share capital into classes and adopt the new memorandum and articles eg. appropriate minutes, notices and resolutions.
  
  
• A full commentary explaining the procedures that must be followed
  
  
• Checking and filing of the relevant documentation at Companies House
  
  
• Reprinting six bound copies of the revised memorandum and articles of association.
  

Our services to convert and issues shares in bearer form include:

• Preparation of all necessary documents to convert the shares to bearer form, including minutes, notices and resolutions.
  
  
• Preparation of the share warrants, setting out the terms on which the bearer shares are issued.
  
  
• Preparation and filing of all necessary Companies House forms:
  
  
• Dealing with the payment of the stamp duty payable on creation of the bearer shares.
  

Next steps

Our fees to give the company the necessary power to issue bearer share warrants start at £375 + VAT (£440.63)

Our fees for the conversion of shares to bearer start at £350 + VAT (£411.25).

Download our information sheet and order form.

For more information on our bearer share services please contact our Corporate Legal Services team.