What we need to know about the share certificate in Mary Poppins – Spear’s
04 / 02 / 2019
The article was originally published by Spear’s on 17 January 2019.
Here’s why the search for the prima facie document in the film is so important, writes Alex Green
One of the main plot points of Disney’s festive release, Mary Poppins Returns, is the frantic search for a misplaced share certificate confirming Mr Banks’ ownership of valuable shares. While being amused by the exploration of different worlds through bath plugholes and china vases, the film raises important practical questions for high net worth individuals and professionals, such as the importance of share certificates and what to do if they are misplaced.
A share certificate is a one page document executed by the company to whose shares the certificate relates which will include information such as the shareholder’s name and address; the company’s full name, address and registered number; and the number and class of shares held by the shareholder.
A share certificate enables the holder of the shares to prove that they have prima facie marketable title to their shares and therefore makes it easier, particularly in the case of private companies where there is not necessarily a liquid market for their shares, to sell their shares. It is for this reason that shares in private companies tend to be certificated whereas these days shares in publicly traded companies will be created in a dematerialised form in order to allow for public trading.
If you lose a share certificate, your rights as a shareholder are not affected and you are still entitled to participate as your share class stipulates. Importantly, a share certificate is not the only way of proving title to shares in a company because a company is required to keep and maintain a register of its shareholders. The significance of the register of members is such that one only becomes a shareholder once entered into the register of members. Therefore, a share certificate should not be issued before your name is entered into the register of members.
Consequently, the company’s register of members should already contain details of your shareholding.
If you are unable to locate the share certificate, you can simply request a new share certificate from the company although its articles of association may stipulate a fee for this.
The directors of the company may also request that you enter into a deed of indemnity (usually in the form of a letter) in which you confirm that you have lost the share certificate and have not transferred it to somebody else.
The executor can write to the company requesting a new share certificate but the company will require proof of the executor’s authority to act in the form of a death certificate and a court sealed copy of the Grant of Representation. The Company may also require you enter into a deed of indemnity and pay a fee.
Furthermore, the executor should ensure that the register of members is updated to reflect that they are the executor.