The replacement procedure of a lost share certificate
A share certificate is a legal document given by a company to its shareholders to prove shares ownership. It gives you the mandate to sell or transfer shares to a new owner. Just like any other item, you can lose it by either damage to misplacement. As much as it won’t affect your legal position as a shareholder, misplacing your share certificate may delay some administrative tasks. So what do you do when you lose the document?
Contact the issuing company
The first step is to notify the company that the document is lost, not pledged or sold. It will help stop any malicious share dealings. Please note that it would be wise to report the loss early enough before an innocent buyer purchases the lost one.
You can communicate to the company by either email or letter through the address. For private companies, the replacement process may take fewer steps. However, a shareholder in a public listed company may have to fill in an NSA form stating when last he made transactions with the original document. You may still have to indicate whether you have authorized any share transfer with the lost certificate.
Verification
The company’s registrar will require proof of identity and address before completing the request. Based on the company, you might have to tell all the facts surrounding the document’s loss.
If your certificate got stolen during a burglary, submit a crime reference number from the police. It means that you may have to file a first information report with the police, giving details of the loss incidence. Ensure that you remain as detailed as possible.
You will be required to avail of an indemnity, a signed document aimed at protecting the company from any misuse or loss of the original copy if recovered. Every company has different charges for the purchase of an indemnity bond. If the value of the lost certificate is significant, you may consider a third party indemnity guarantee. It also happens when the circumstances of loos seem suspicious.
After reporting, the company should freeze any transactions with the document for at least 30 days to prevent fraudulent operations. After the company thoroughly scrutinizes your details, you now qualify for a replacement.
The replacement of the share certificate
It’s a requirement that you avail some give general information. You will fill in a form to present your identity number, full name, telephone number, folio number, share certificate number, and email address. Still, you may have to submit photographic proof of evidence in a passport, driving license, or residency.
Also, present details of the last statements, if any. The company will then mark canceled the original certificate. They will guide you through a company-specific share certificate replacement procedure. The organization will need to fulfill a publication requirement by preparing a notice before releasing the new document. They should present a notice of intention to issue a new share certificate and cancel the original.
Certificate issuance
Once the company checks the accuracy of the data provided in the NSA form, you can receive a new document. The company then prepares a notice on the company’s websites within 14 days after issuing out the share certificate and then present a copy to the Hong Kong Exchange. You will receive a new certificate number since it’s a replacement and not a duplicate. It will help tell apart the two documents in case the older one reappears later.
When the company sends the duly new certificate to a shareholder, they may request you to destroy the older one or return it if found. The company only issues the document after the shareholder satisfies all the requirements. For instance, if the notice published doesn’t bring about other claims relating to the loss of shares. The organization may also decide to impose a reasonable fee to cover the administrative burden of replacing the certificate.
Conclusion
Share certificate replacement might be a time consuming and costly process. Shareholders, therefore, need to take great care of their certificates. Besides, one should update their records with the company’s registrar, for instance, changes in correspondence address. However, in case of loss or misplacement of a certificate, use the above replacement steps to avoid further financial risks.