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?
- where one or more shareholders wish to remove a director
- where the Articles of Association do not include a simpler removal process
- as special notice pursuant to the Companies Act 2006 to remove a director
Key features
- special notice required to remove a director from office
- including an ordinary resolution to remove a director, for use by either a single shareholder or multiple shareholders
- alternative forms covering:
- removal of director only
- removal of director and appointment of replacement director
What else do I need to know?
Under section 168 of the Companies Act 2006, shareholders can remove a director by passing an ordinary resolution at a general meeting. This decision cannot be made by written resolution. The shareholder proposing the removal must give formal notice to the company. The Articles of Association cannot override this statutory process or change the notice periods required for the process.
Once the company receives special notice, the board must call a shareholder meeting. This meeting must take place at least 28 days after the notice is received. The director facing removal has the right to submit written representations, which the company must circulate to shareholders before the meeting.
The special notice may also propose appointing a new director to replace the one being removed.
In some companies, weighted voting rights can protect shareholder-directors being removed from office by granting them extra votes on removal resolutions. This is common in joint ventures, multi-shareholder businesses, or investor agreements where director rights need protection.
Being removed as a director does not affect employment rights, but it may lead to legal claims, such as wrongful dismissal. If the removed director is also a shareholder, they may claim unfair prejudice under the Companies Act 2006 – particularly in quasi-partnerships, where they expected to be involved in management. If the claim succeeds, the court may order other shareholders to buy their shares at fair value.
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Updated by a lawyer on 03/09/2024
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