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Bearer shares: are their days numbered?

Contributed by Laveco Ltd
07 August, 2012

Contributed by Laveco Ltd. [www.laveco.com]

Bearer shares have been extremely popular in the jurisdictions where the legislation allowed for the issue of such shares. Although in the past it really was possible to own a company anonymously with this type of shares, this possibility has no longer been available for at least 10 years. The majority of the world’s banks, for example, require from their clients a declaration regarding the true beneficiary, possessor or owner of bearer shares. If, that is, they will talk to such companies in the first place. As I mentioned in my leading article, numerous banks even close the door on companies which theoretically have the possibility of issuing bearer shares. It is worth thinking very carefully before opting to use this type of share, as it may lead to many complications in the future operation of the company, and in the face of meeting anti-money laundering laws, anonymity can no longer be maintained. The operability of a share company is another practical question. The most important decision-making forum of a share company is the shareholders’ meeting, which all authorised shareholders are entitled to attend and where they can exercise their rights. In the case of bearer shares, though, where does the director send the invitation to the shareholders’ meeting? Generally, they are sent out to the last address of the shareholder recorded in the share register, though other means may also be used. And although in today’s world the possibility is there to vote via the Internet, the lack of a postal address may lead to serious obstacles in the lawful operation of the company.

August 2012

Contact LAVECO LTD.:

Web site: www.laveco.com

United Kingdom
3rd Floor, Blackwell House,
Guildhall Yard, London
EC2V 5AE United Kingdom
Tel.: 44-207-556-0900
Fax: 44-207-556-0910
E-mail: london@laveco.com

33/a Raday street,
1092 Budapest,
Tel.: 36-1-456-72-00
Fax: 36-1-456-72-01
E-mail: hungary@laveco.com

Despina Sofia Complex
Ap. 202, United Nations 8
Drosia 6042, Larnaca, Cyprus
Tel.: 357-24-636-919
Fax: 357-24-636-920
E-mail: cyprus@laveco.com

59 Buzesti Str., A5 Block
1st Scale, 1st Floor, 62nd Flat,
1st District, Bucharest, Romania
Tel.: 40-21-311-61-76
Mob: 40-747-595-132
Fax: 40-21-311-61-82
E-mail: office@optitax.ro

Porto Lagos No.1,Ent.2, Floor 5, Ap.42, 1463 Sofia, Bulgaria
Tel.: 359-2-953-2989
Mob: 359-888-126-013
Fax: 359-2-953-3502
E-mail: bulgaria@laveco.com

Suite 2, Oliver Maradan Bld.
Oliver Maradan Street,Victoria
Mahé, Seychelles
Tel.: 248-4-322-261
Fax: 248-4-324-932
E-mail: seychelles@laveco.com

Tags: legislation | law | offshore | tax


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