Does a company have to issue share certificates?

By law, a shareholder is entitled to receive from the company an original share certificate for the shares which it holds, whether these were acquired following an allotment or a transfer of shares.

What can I do if I’ve lost my share certificate?

A shareholder who has lost or destroyed a share certificate is entitled to request a replacement certificate from the company. The company will usually require an indemnity for lost share certificate, under which the shareholder agrees to indemnify the company for any loss arising as a consequence of the issue of the replacement certificate.

What do I do if I can’t find my share certificate and want to transfer the shares?

On a transfer of shares, the transferring shareholder should deliver to the company the share certificate which covers the shares being transferred. If the share certificate has been lost or destroyed, the shareholder may instead deliver a lost share certificate indemnity, under which the shareholder agrees to indemnify the company for any loss arising as a consequence of the approval and registration of the share transfer in circumstances where the share certificate has not been produced.

Indemnity for lost share certificate template

Our indemnity for lost share certificate template covers alternative situations depending on whether or not the shareholder is also at the same time transferring shares covered by the lost or destroyed certificate.

if a shareholder has lost its original share certificate or it has been destroyed
if applicable, alongside a transfer of the shares covered by the lost or destroyed original certificate

What are the key features?

different forms of indemnity, depending on whether the shareholder is also transferring shares
alternative forms of indemnity, depending on whether the shareholder is an individual or a company

What else do I need to know?

What is a share certificate?

A share certificate is a document evidencing ownership of shares in a company. By law, shareholders are entitled to receive this certificate when they acquire shares, either through allotment or transfer.

What happens if a share certificate is lost or destroyed?

If a shareholder loses or destroys their certificate, they can ask the company for a replacement. To safeguard itself, the company will usually require a lost share certificate indemnity. This is a legal undertaking under which the shareholder agrees to cover any losses the company might face by issuing the replacement.

What risks does the indemnity protect against?

The indemnity protects the company from risks such as:

Duplicate Claims: If the original certificate reappears, someone else might claim ownership, causing disputes or financial loss.
Fraudulent Claims: A person could falsely claim to have lost the certificate and misuse the replacement, for example, by attempting to sell the shares unlawfully.
Administrative Errors: Mistakes in issuing a replacement or registering a transfer without the original certificate could lead to legal administrative errors.
Legal Liability: If a replacement certificate or transfer is improperly handled, the company might be held responsible for resulting losses.

Description

When do I use this document?

as a document to be delivered by a seller at closing of a Share Purchase Agreement
when stamp duty is payable on the share transfer
to enable the buyer to vote and exercise other share rights pending the registration of the share transfer

What are the key features?

- suitable for an individual or corporate seller
- appointment of the buyer as the seller’s attorney
- grant of authority to the buyer to exercise all rights as the legal owner of the sale shares
- irrevocable appointment given by way of security

What else do I need to know?

Following the closing of a share sale transaction, the seller will remain the registered owner of the shares which have been sold until the buyer has paid the necessary stamp duty. This process can take a number of weeks. The transfer of the sale shares cannot be registered in the register of members of the target company until the stamp duty has been paid.

The buyer will want to be able to exercise all the rights as the owner of the sale shares notwithstanding that the seller remains the registered legal owner of the sale shares. To enable the buyer to do this, the buyer will usually require that the seller grants a power of attorney in favour of the buyer which enables the buyer to exercise the legal rights of ownership of the sale shares.

If a share transfer involves consideration exceeding £1,000, stamp duty will be payable to HMRC and HMRC will need to confirm that the stamp duty has been paid. This stamping process typically takes a few weeks and involves payment of the stamp duty and submission of the stock transfer by email to HMRC for HMRC to confirm the payment.

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£25.00 exc VAT

Updated by a lawyer on 03/09/2024

Updated By a lawyer on 11/03/2022

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Indemnity for lost share certificate template

When do I use this document?

What are the key features?