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.
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When do I use this document?
- 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.
When do I use this document?
- when a shareholder waives their pre-emption rights on the transfer of shares by another shareholder
- when the shareholder agrees to waive its first refusal rights under either the company’s Articles of Association or Shareholders Agreement
What are the key features?
- different forms of waiver, depending on whether the waiving shareholder is an individual or a company
- optional wording based on whether the pre-emption rights arise under either the Articles of Association or Shareholders Agreement
- waiver in the form of a Deed
What else do I need to know?
When do pre-emption rights apply on a share transfer?
Shareholders may have pre-emption rights in relation to the proposed transfer of existing shares in the company by another shareholder.
Pre-emption rights exist and operate as a right of first refusal, allowing non-transferring shareholders to acquire shares in proportion to their existing number of shares for the same cash consideration as the selling shareholder proposes to sell them to a third party and before the shares can be acquired by another party. The buyer could be another current shareholder or someone who is not already a shareholder.
Pre emption rights arise from either the company’s Articles of Association or the company’s Shareholders Agreement (or possibly both). They will not apply if the company does not have a Shareholders Agreement and has adopted, without amendment, the Model Articles for private limited companies. The Companies Act 2006 does not contain a statutory pre-emption right on the transfer of shares. See Articles of Association – pre-emption (share transfer) for pre-emption rights to include in Articles of Association by passing a special resolution.
A non-transferring shareholder can elect not to accept the offer to purchase the shares and instead to waive their pre-emptive rights in relation to a proposed transfer. To do so, the non-transferring shareholder should sign a waiver of pre-emption rights.
What other documents are available?
For a deed of waiver disapplying pre-emption on a proposed allotment of new shares, see
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Updated by a lawyer on 03/09/2024
- Updated By a lawyer on
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