There is only a small window of opportunity for companies to apply to the court to cancel bearer shares.

In my previous blog, I mentioned that 26 February 2016 was the deadline for bearer shareholders (BH) to surrender their share warrants, get their bearer shares converted to ordinary shares and get their rights back.

If your company did not have anyone surrender their bearer share warrants before the deadline, then action is still required! You still need to apply to the court to have them cancelled! The 3 month window for companies to apply to the court to cancel their bearer shares began on 26 March 2016 and finishes on 26 June 2016.

A company’s application to the court can go one of two ways;

• The court grants the cancellation order as it is satisfied the company provided sufficient notices to the BH during the surrender period.
• The court grants a suspended cancellation order giving the BH a 2-month grace period in which the company must notify them of the need to surrender their share warrants.

Whether the bearer shares are cancelled as a result of a cancellation order or suspended cancellation order, within 14 days after the order is granted Companies House must be notified with a copy of the order and a statement of capital. When the cancellation happens the company must pay into court the nominal value of the bearer shares together with any premium and any interest that has accrued. The individual who held the share warrants on 26 December 2015 can apply to the court for payment of the sum. However, such application can only be made within 6 months and 3 years after the cancellation of the bearer shares and the court will only make payment in exceptional circumstances.

It should be noted that a company cannot apply to Companies House to be struck-off if it still has bearer shares in issue. Also, failure of a company to take any action will constitute an offence by the company and its officers. Therefore, it would be prudent for companies that still have bearer shares to seek advice and help with cancelling any bearer shares that are still in issue.

For assistance with any outstanding issues you may have related to bearer shares, please do get in touch.