Can a share certificate be executed by electronic means?

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Published by a UU��ֱ�� Corporate expert

Published on: 15 July 2019

This Q&A relates to certificated Shares (ie not shares traded via the CREST system). It assumes no overseas legal (or cross-border) considerations arise.

There is nothing that prohibits a share certificate being executed electronically (ie using an electronic signature), provided the form of a company’s share certificate and the method of its Execution complies with any requirements set out in the articles of association of the company whose shares are being transferred and any other relevant agreement, such as a shareholders’ agreement, as well as the Listing Rules (where relevant).

The validity of a document executed under hand using an electronic signature is generally accepted (see below, Can a share certificate be validly executed under hand using an electronic signature?). However, the validity of a document executed as a deed using an electronic signature remains uncertain (see below, Can a share certificate be validly executed as a deed using an electronic signature?).

In addition, even if legally valid, use of an electronic signature to execute a share certificate may raise practical difficulties.

Jurisdiction(s):

United Kingdom

Key definition:

Electronic means definition

What does Electronic means mean?

In the context of electronic communication between a company and its shareholders, a document or information is sent or supplied by electronic means if it is sent initially and received at its destination by means of electronic equipment for the processing (this expression includes digital compression) or storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means (CA 2006, s 1168(4)).

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