A company must have share certificates ready for delivery within two months of allotting shares, and within two months of a valid transfer being lodged, unless the terms of issue say otherwise (sections 769 and 776 of the Companies Act 2006). Under the model articles a certificate states the number, class and nominal value of the shares, that they are fully paid and any distinguishing numbers, and is sealed or executed in accordance with the Act. A shareholder whose certificate is lost, stolen or destroyed is entitled to a replacement, subject to conditions on evidence, an indemnity and a reasonable fee.

When must a company issue a share certificate?

Two duties apply, one for new shares and one for transfers:

  • On allotment. Section 769 requires certificates for the shares allotted to be completed and ready for delivery within two months after the allotment.
  • On transfer. Section 776 requires the same within two months after a transfer is lodged with the company. A “transfer” here means one that is duly stamped and otherwise valid (or an exempt transfer under the Stock Transfer Act 1982), and excludes one the company is entitled to refuse and does not register.

Neither duty applies where the conditions of issue provide otherwise, or where the shares are allotted or transferred to a financial institution as defined in section 778, essentially a recognised clearing house or central securities depository or its nominee. That exception is what allows listed shares to be held electronically.

Failure to comply is an offence by every officer in default, punishable by a fine of up to level 3 on the standard scale with a daily default fine for continued contravention. A shareholder also has a civil route under section 782: if the company does not make good the default within ten days of being served with a notice requiring it, the shareholder can apply to the court for an order, with costs potentially falling on the company or the officer responsible.

What does a share certificate have to show?

The Act itself does not prescribe a form. For a company using the model articles for private companies, article 24 sets the rules:

  • the company must issue each shareholder, free of charge, with one or more certificates for the shares they hold;
  • each certificate must state how many shares, of what class, it covers, their nominal value, that they are fully paid, and any distinguishing numbers;
  • a certificate cannot cover shares of more than one class;
  • jointly held shares get one certificate, not one per holder;
  • the certificate must have the company’s common seal affixed or be otherwise executed in accordance with the Companies Acts.

Most companies no longer have a seal, so execution follows section 44: signature by two authorised signatories (any director, or the company secretary where there is one) or by one director in the presence of a witness who attests the signature. Bespoke articles may allow certificates for partly paid shares or different execution methods, so always check them first.

Is the certificate proof of ownership?

Only up to a point. For a company registered in England and Wales or Northern Ireland, section 768 makes a certificate under the company’s common seal prima facie evidence of the holder’s title. For a Scottish company, a sealed certificate or one subscribed under the Requirements of Writing (Scotland) Act 1995 is sufficient evidence unless the contrary is shown.

Legal ownership is fixed by the register of members, not the paper. Section 113 requires the register to show the shares held by each member, distinguished by number where they are numbered and by class where there is more than one class, and the amount paid up. Under article 26(4) of the model articles, a seller remains the holder until the buyer’s name is entered on the register. Handing over a certificate does not by itself transfer shares; see statutory registers.

How do certificates fit into a share transfer?

A typical sale of private company shares works like this:

  1. The seller signs a stock transfer form and gives it, with the existing certificate, to the buyer.
  2. The buyer pays any Stamp Duty: 0.5% where shares are bought using a stock transfer form and the transaction is over £1,000.
  3. The documents are lodged with the company. Section 770 prevents registration unless a proper instrument of transfer has been delivered.
  4. Within two months of lodging, the company must register the transfer or give the buyer notice of refusal with reasons (section 771).
  5. Within the same two months the company must have the new certificate ready (section 776). Where only part of a holding is sold, the seller needs a balance certificate for the shares retained, and the old certificate is cancelled.

The model articles also say no fee may be charged for registering a transfer (article 26(2)). The wider process is covered in transferring shares, and transfers on death in transmission of shares on death.

How is a lost certificate replaced?

Under article 25 of the model articles, if a certificate is damaged or defaced, or said to be lost, stolen or destroyed, the shareholder is entitled to a replacement for the same shares. When asking for one, the shareholder:

  • can choose at the same time to have a single certificate or separate certificates;
  • must return the damaged or defaced certificate;
  • must comply with any conditions on evidence, indemnity and payment of a reasonable fee that the directors decide.

In practice the directors check the claim against the register of members, ask the shareholder to sign a letter of indemnity protecting the company if the original resurfaces in someone else’s hands, record the decision in a board minute, mark the old certificate number as cancelled and issue a new certificate, often marked as a replacement. Companies with bespoke articles should follow their own wording, which may differ.

What about bearer shares and shares held electronically?

Share warrants, which entitled the bearer to the shares and passed by delivery, can no longer be issued. Section 779(4) bans any new share warrant on or after the date section 84 of the Small Business, Enterprise and Employment Act 2015 came into force, whatever the articles say. Shares can, however, be held and transferred without a paper certificate under regulations made under Chapter 2 of Part 21, as section 544(2) recognises, and the section 778 exception removes the certificate duty for shares held through recognised clearing houses and depositories.

How does the timing work in practice?

Illustration only. A company allots 500 new ordinary shares on 3 March. It must have the certificate ready by 3 May, and separately file the return of allotment within one month (section 555), so by 3 April; see allotting shares. On 10 June an existing holder lodges a stamped transfer of 200 of her 1,000 shares. By 10 August the company must have registered the transfer (or given reasons for refusing), issued a certificate for 200 shares to the buyer and a balance certificate for 800 shares to the seller, and cancelled her old certificate.

What are the common mistakes?

  • Never issuing certificates to the founding shareholders at incorporation.
  • Certificate numbers, holdings or classes that do not match the register of members.
  • Describing shares as fully paid when the subscription money has not been received.
  • Signature by a single director with no witness, so the certificate is not properly executed.
  • Issuing a replacement without an indemnity, or without cancelling the original.
  • Treating a certificate as transferring title on delivery and failing to update the register.
  • Combining two classes on one certificate contrary to the articles.

Keeping the certificates, the register of members and Companies House filings consistent avoids awkward questions at the next confirmation statement or on a sale.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.