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Share Warrant

shares, company, bearer, stock, articles and therein

SHARE WARRANT. A share warrant to bearer entitles the holder of it to the fully paid-up shares or stock named therein, and the ownership is transferred by simply handing the warrant to the purchaser.

A company limited by shares may issue share warrants to bearer, in accordance with the regulations contained in Section 37 of the Companies (Consolidation) Act, 190S : " (1) A company limited by shares, if so authorised by its articles, may, with respect to any fully paid-up shares, or to stock, issue under its common seal a warrant stating that the bearer of the warrant is entitled to the shares or stock therein specified, and may provide, 13) coupons or otherwise, for the payment of the future dividends on the shares or stock included in the warrant, in this Act termed a share warrant.

" (2)A share warrant shall entitle the bearer thereof to the shares or stock therein specified, and the shares or stock may be transferred by delivery of the warrant.

" (3) The bearer of a share warrant shall, subject to the articles of the com pany, be entitled, on surrendering it for cancellation, to have his name entered as a member in the register of members ; and the company shall be responsible for any loss incurred by any person by reason of the company entering in its register the name of a bearer of a share warrant in respect of the shares or stock therein specified without the warrant being surrendered and cancelled.

" (4) The bearer of a share warrant may, if the articles of the company so provide, be deemed to be a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles ; except that he shall not be qualified in respect of the shares or stock specified in the warrant for being a director or manager of the company, in cases where such a qualification is required by the articles.

" (5) On the issue of a share warrant the company shall strike out of its register of members the name of the member then entered therein as holding the shares or stock specified in the warrant as if he had ceased to be a member, and shall enter in the register the following particulars namely : " (i) The fact of the issue of the warrant ; " (ii) A statement of the shares or stock included in the war rant, distinguishing each share by its number ; and " (iii) The date of the issue of the warrant.

" (6) Until the warrant is surrendered, the above particulars shall be deemed to be the particulars required by this Act to be entered in the register of members ; and, on the surrender, the date of the surrender must be entered as if it were the date at which a person ceased to be a member." A share warrant to bearer has been held by mercantile usage to be a negotiable instru ment. As it is transferable by mere delivery, the simple pledge of a share warrant, without any transfer form, is all that is required to give a banker a security, but a memorandum or agreement under hand (stamp, 6d.) should be signed by the person depositing such a warrant as security, to show quite clearly the reason why it has been deposited.

Where a share warrant to bearer is pur chased in good faith and without notice that it has been stolen, the purchaser obtains a complete title to it, even though the warrant had been stolen by the person who sold it.

The following is a specimen of a share warrant to bearer :— This is to certify that the bearer of this warrant is the proprietor of ten fully paid-up shares No. to of Ten pounds sterling each in the Company, Limited, subject to the Articles of Associa tion of the Company.

Given under the Common Seal of the Company in London this day of 19 .

A sheet of coupons for the payment of the interest is attached to the warrant.

By the Stamp Act, 1S91 :