Lost share certificates


M

Michael G

I am a minority shareholder in a small private limited company. I have
lost my certificates and have contacted the company for replacements.
I'd be grateful for feedback regarding a reasonable charge for this.

Thanks
 
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M

Martin

Michael G said:
I am a minority shareholder in a small private limited company. I have
lost my certificates and have contacted the company for replacements. I'd
be grateful for feedback regarding a reasonable charge for this.

Thanks
I assume you want to sell your shares - otherwise, why bother about the
certificate?

You've not said how much you've been quoted, but up to a tenner for the
share cert strikes me as ample.

The indemnity premium, however, is another matter.

Many small Ltd Coys have M+AA which restrict the right to sell shares to a
non-shareholder until you've gone through assorted hoops. This may minimise
the exposure of the Company to the risk of your original cert turning up in
the wrong hands.

It's a small company, so just chat up the Co.Sec. and explain / discuss if
you think the figure you've been quoted is excessive.
 
R

Ronald Raygun

Martin said:
I assume you want to sell your shares - otherwise, why bother about the
certificate?

You've not said how much you've been quoted, but up to a tenner for the
share cert strikes me as ample.

The indemnity premium, however, is another matter.
Why would there be a need for any indemnity premium?

Surely it is not the case that the certificate has intrinsic value
and that in some sense it "is" the share, it's merely one of several
(well, at least two) pieces of evidence that the owner owns the share.
The more definitive piece of evidence is the company's own share
register.

The worst that could happen is either that the legitimate owner might
be trying to commit fraud by selling his share to an innocent mug,
handing over the certificate, and then misrepresenting to the company
that it has been "lost", or else that it has been stolen from the
legitimate owner by someone who will in due course attempt to sell it.

In either case such a sale would presumably need to be validated by
the company register being updated, and any fraudulent sale would
soon come to light once the would-be new owner tries to register his
ownership.

Would not both those eventualities be adequately covered by the
owner who has discovered that he has lost the certificate *giving*
an indemnity, rather than paying a premium for an insurance-based
indemnity?
 
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M

Martin

Ronald Raygun said:
Why would there be a need for any indemnity premium?

Surely it is not the case that the certificate has intrinsic value
and that in some sense it "is" the share, it's merely one of several
(well, at least two) pieces of evidence that the owner owns the share.
The more definitive piece of evidence is the company's own share
register.

The worst that could happen is either that the legitimate owner might
be trying to commit fraud by selling his share to an innocent mug,
handing over the certificate, and then misrepresenting to the company
that it has been "lost", or else that it has been stolen from the
legitimate owner by someone who will in due course attempt to sell it.

In either case such a sale would presumably need to be validated by
the company register being updated, and any fraudulent sale would
soon come to light once the would-be new owner tries to register his
ownership.

Would not both those eventualities be adequately covered by the
owner who has discovered that he has lost the certificate *giving*
an indemnity, rather than paying a premium for an insurance-based
indemnity?
Couldn't agree with you more, RR.

But IME it doesn't work like that in practice. Shareholders are expected to
trust a company and its directors not to lose their investments, yet the
company does not like the idea of an indemnity unless it is backed by, er,
another company.

Maybe it's different for small companies?
 

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