Companies Act 2006 s.122 – Share warrants

[^F118 (1)Until a share warrant issued by a company is surrendered the following are deemed to be the particulars required to be entered in the register of members in respect of the warrant—

(a)the fact of the issue of the warrant,

(b)a statement of the shares included in the warrant, distinguishing each share by its number so long as the share has a number, and

(c)the date of the issue of the warrant.^F118]

(3)The bearer of a share warrant may, if the articles of the company so provide, be deemed a member of the company within the meaning of this Act, either to the full extent or for any purposes defined in the articles.

^F119(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)The company is responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant in respect of the shares specified in it without the warrant being surrendered and cancelled.

(6)On the surrender of a share warrant, the date of the surrender must be entered in the register.

Read section 122 in the full Act → Definitions (5) Cases (3)

Definitions used in section 122

share: (1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.
Defined in s.540(1) · see it in the full Act
company: “company” means a company formed and registered under this Act, that is—

(a)
a company so formed and registered after the commencement of this Part, or

(b)
a company that immediately before the commencement of this Part—
(i)
was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)
was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act; (4) In this section and that Schedule “company” includes any body corporate.
Defined in s.1159(4) · see it in the full Act
the register: (2) The records relating to companies are referred to collectively in the Companies Acts as “the register”.
Defined in s.1080(2) · see it in the full Act
member: (2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .
Defined in Sch.2 Pt.1 · see it in the full Act
articles: (4) References in the Companies Acts to a company's “articles” are to its articles of association.
Defined in s.18(4) · see it in the full Act

Cases considering section 122 (3)

IN THE MATTER OF WATERSIDE NURSERY LIMITED AND IN THE MATTER OF SCHEDULE 4 TO THE SMALL BUSINESS, ENTERPRISE AND EMPLOYMENT ACT 2015

[2022] EWHC 327 (Ch) · 16 February 2022Limits

Explains the former treatment of bearer warrants in the register of members. It is background to the abolition scheme. (see para [7]) Identifies the just and equitable ground for court-ordered winding up. The court regarded winding up as an impractical alternative that would undermine the statutory aim of abolishing bearer shares without destroying the company. (see para [44])

Fons HF v Corporal Ltd & Anor

[2013] EWHC 1801 (Ch) · 28 June 2013Defines

The judgment referred to the provision as illustrating the nature of a warrant as a negotiable instrument entitling its bearer to specified shares. It assisted the contextual comparison of listed securities (see para [57.4]).

Eckerle & Ors v Wickeder Westfalenstahl GmbH & Anor

[2013] EWHC 68 (Ch) · 23 January 2013

Section 122 was cited as another example of the Act treating the registered person as the holder of shares. (see para [19])

What each judgment says about section 122 is in the case-law panel in the full Act.

Explanatory note

249.This section replaces section 355 of the 1985 Act and implements the CLR recommendation (Completing the Structure, paragraph 5.41) in making clear that shares need not first be issued in registered form, but can be issued directly in warrant to bearer form.

All the explanatory notes for the Act

Amendments and notes

2 notes from legislation.gov.uk

Amendments

F118S. 122(1) substituted for s. 122(1)(2) (26.5.2015) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(3)(g)(ii), Sch. 4 para. 23(a)
F119S. 122(4) omitted (26.5.2015) by virtue of Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(3)(g)(ii), Sch. 4 para. 23(b)