C22C1C21Part 21Certification and transfer of securities
Pt. 21 applied (with modifications) (8.00 a.m. on 29.9.2008) by The Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008 (S.I. 2008/2546), art. 4(7)
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
Chapter 1Certification and transfer of securities: general
Issue of certificates etc on allotment
C2C7769Duty of company as to issue of certificates etc on allotment
1
A company must, within two months after the allotment of any of its shares, debentures or debenture stock, complete and have ready for delivery—
a
the certificates of the shares allotted,
b
the debentures allotted, or
c
the certificates of the debenture stock allotted.
2
Subsection (1) does not apply—
a
if the conditions of issue of the shares, debentures or debenture stock provide otherwise,
b
in the case of allotment to a financial institution (see section 778), or
c
in the case of an allotment of shares if, following the allotment, the company has issued a share warrant in respect of the shares (see section 779).
3
If default is made in complying with subsection (1) an offence is committed by every officer of the company who is in default.
4
A person guilty of an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
Transfer of securities
C8770Registration of transfer
1
A company may not register a transfer of shares in or debentures of the company unless—
a
a proper instrument of transfer has been delivered to it, or
b
the transfer—
i
is an exempt transfer within the Stock Transfer Act 1982 (c. 41), or
ii
is in accordance with regulations under Chapter 2 of this Part.
2
Subsection (1) does not affect any power of the company to register as shareholder or debenture holder a person to whom the right to any shares in or debentures of the company has been transmitted by operation of law.
F1F93
If an election under Chapter 2A of Part 8 is in force in respect of the company, references in this section to registering a transfer (or a person) are to be read as references to delivering particulars of that transfer (or person) to the registrar under that Chapter.
C9771Procedure on transfer being lodged
1
When a transfer of shares in or debentures of a company has been lodged with the company, the company must either—
a
register the transfer, or
b
give the transferee notice of refusal to register the transfer, together with its reasons for the refusal,
as soon as practicable and in any event within two months after the date on which the transfer is lodged with it.
F51A
The company may not register the transfer under subsection (1)(a) unless satisfied that it has the information that it is required to enter in its register of members in relation to the transferee.
2
If the company refuses to register the transfer, it must provide the transferee with such further information about the reasons for the refusal as the transferee may reasonably request.
This does not include copies of minutes of meetings of directors.
F13F102A
If an election is in force under Chapter 2A of Part 8 in respect of the company, references in this section to registering the transfer are to be read as references to delivering particulars of the transfer to the registrar in accordance with that Chapter.
3
If a company fails to comply with this section, an offence is committed by—
a
the company, and
b
every officer of the company who is in default.
4
A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
5
This section does not apply—
a
in relation to a transfer of shares if the company has issued a share warrant in respect of the shares (see section 779);
b
in relation to the transmission of shares or debentures by operation of law.
772Transfer of shares on application of transferor
On the application of the transferor of any share or interest in a company, the company shall enter in its register of members the name of the transferee F14F12(or, as the case may be, deliver the name of the transferee to the registrar under Chapter 2A of Part 8) in the same manner and subject to the same conditions as if the application for the entry F3F8(or delivery) were made by the transferee.
773Execution of share transfer by personal representative
An instrument of transfer of the share or other interest of a deceased member of a company—
a
may be made by his personal representative although the personal representative is not himself a member of the company, and
b
is as effective as if the personal representative had been such a member at the time of the execution of the instrument.
C10774Evidence of grant of probate etc
The production to a company of any document that is by law sufficient evidence of the grant of—
a
probate of the will of a deceased person,
b
letters of administration of the estate of a deceased person, or
c
confirmation as executor of a deceased person,
shall be accepted by the company as sufficient evidence of the grant.
C11775Certification of instrument of transfer
1
The certification by a company of an instrument of transfer of any shares in, or debentures of, the company is to be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on their face show a prima facie title to the shares or debentures in the transferor named in the instrument.
2
The certification is not to be taken as a representation that the transferor has any title to the shares or debentures.
3
Where a person acts on the faith of a false certification by a company made negligently, the company is under the same liability to him as if the certification had been made fraudulently.
4
For the purposes of this section—
a
an instrument of transfer is certificated if it bears the words “certificate lodged” (or words to the like effect);
b
the certification of an instrument of transfer is made by a company if—
i
the person issuing the instrument is a person authorised to issue certificated instruments of transfer on the company's behalf, and
ii
the certification is signed by a person authorised to certificate transfers on the company's behalf or by an officer or employee either of the company or of a body corporate so authorised;
c
a certification is treated as signed by a person if—
i
it purports to be authenticated by his signature or initials (whether handwritten or not), and
ii
it is not shown that the signature or initials was or were placed there neither by himself nor by a person authorised to use the signature or initials for the purpose of certificating transfers on the company's behalf.
Issue of certificates etc on transfer
C3C12C17776Duty of company as to issue of certificates etc on transfer
1
A company must, within two months after the date on which a transfer of any of its shares, debentures or debenture stock is lodged with the company, complete and have ready for delivery—
a
the certificates of the shares transferred,
b
the debentures transferred, or
c
the certificates of the debenture stock transferred.
2
For this purpose a “transfer” means—
a
a transfer duly stamped and otherwise valid, or
b
an exempt transfer within the Stock Transfer Act 1982 (c. 41),
but does not include a transfer that the company is for any reason entitled to refuse to register and does not register.
C4C183
Subsection (1) does not apply—
a
if the conditions of issue of the shares, debentures or debenture stock provide otherwise,
b
in the case of a transfer to a financial institution (see section 778), or
c
in the case of a transfer of shares if, following the transfer, the company has issued a share warrant in respect of the shares (see section 779).
C4C184
Subsection (1) has effect subject to section 777 (cases where the Stock Transfer Act 1982 applies).
5
If default is made in complying with subsection (1) an offence is committed by every officer of the company who is in default.
6
A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
C5C19777Issue of certificates etc: cases within the Stock Transfer Act 1982
1
Section 776(1) (duty of company as to issue of certificates etc on transfer) does not apply in the case of a transfer to a person where, by virtue of regulations under section 3 of the Stock Transfer Act 1982, he is not entitled to a certificate or other document of or evidencing title in respect of the securities transferred.
2
But if in such a case the transferee—
a
subsequently becomes entitled to such a certificate or other document by virtue of any provision of those regulations, and
b
gives notice in writing of that fact to the company,
section 776 (duty to company as to issue of certificates etc) has effect as if the reference in subsection (1) of that section to the date of the lodging of the transfer were a reference to the date of the notice.
Issue of certificates etc on allotment or transfer to financial institution
C6C13C16C20F4778Issue of certificates etc: allotment or transfer to financial institution
1
A company—
a
of which shares or debentures are allotted to a financial institution,
b
of which debenture stock is allotted to a financial institution, or
c
with which a transfer for transferring shares, debentures or debenture stock to a financial institution is lodged,
is not required in consequence of that allotment or transfer to comply with section 769(1) or 776(1) (duty of company as to issue of certificates etc).
2
A “financial institution” means—
a
a recognised clearing house F6or a recognised CSD acting in relation to a recognised investment exchange, or
b
a nominee of—
i
a recognised clearing house F6or a recognised CSD acting in that way, or
ii
a recognised investment exchange,
designated for the purposes of this section in the rules of the recognised investment exchange in question.
3
Expressions used in subsection (2) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000 (c. 8).
Supplementary provisions
C14782Issue of certificates etc: court order to make good default
1
If a company on which a notice has been served requiring it to make good any default in complying with—
a
section 769(1) (duty of company as to issue of certificates etc on allotment),
b
section 776(1) (duty of company as to issue of certificates etc on transfer), or
c
section 780(1) (duty of company as to issue of certificates etc on surrender of share warrant),
fails to make good the default within ten days after service of the notice, the person entitled to have the certificates or the debentures delivered to him may apply to the court.
2
The court may on such an application make an order directing the company and any officer of it to make good the default within such time as may be specified in the order.
3
The order may provide that all costs (in Scotland, expenses) of and incidental to the application are to be borne by the company or by an officer of it responsible for the default.
Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))