We previously wrote an article on this subject (Small Business, Enterprise and Employment Act 2015) when the 9 month period for surrendering bearer shares was implemented.
We are now 8 months into the 9 month surrender period for cancelling or transferring bearer shares.
As part of the surrender process there is an obligation on companies to give bearer shareholders notice informing them of their right to surrender their bearer shares and the ramifications of not doing so.
The initial notice must have been given by 26 June 2015. However, there is a second notice required to be given by companies before 26 January 2016.
Failure to provide either of the above mentioned notices constitutes an offence by every director of the company who is in default.
We know that from 26 December 2015, those bearer shares that are still in existence have all of their rights automatically suspended (including voting rights and rights to dividends or other distributions) and the following restrictions applied to them:
1. Any agreement to transfer bearer shares after 26 December 2015 is invalid; and
2. The company must pay any dividends or other distributions which would usually be payable to bearer shareholders into a separate bank account.
The above suspension and restrictions will however fall away upon the conversion of bearer shares into registered shares.
In conclusion, if you have not already converted your bearer shares into registered shares, now is the time do so.
If you would like any advice please contact our Company Commercial team.
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