HomeCompany ArticlesShares Capital, Fundraising and InsolvencyChange to Holding Statements – Unlisted Company

Change to Holding Statements – Unlisted Company

I think it is quite possible that we can move to an uncertificated share register and issue Holding Statements in lieu of share certificates to recognise shareholding details as I can find nothing which says we cannot do it.

Our Constitution contemplates ASX listing and has no reference to issuing share certificates other than in Rule 4 – where it says “whilst listed … …. certificates will be issued if required”. Nowhere does it say certificates must be issued if not listed.

I have another unlisted public company client whose constitution more clearly states: “(a) Unless the Act requires the Company to issue a certificate for particular securities, the Company will not issue share certificates.

  • The Board may at any time determine the Company will issue share certificates. If the Board decides share certificates will be issued, then the Company is not entitled to charge any fee for issuing certificates.”

And one other unlisted public company client has a constitution which does not even mention ASX/listing but simply says “directors may issue share certificates ..….. if the y chose to” – thereby effectively allowing Holding Statements.

The Corporations Act does not say much these days either. The relevant section (1071H) says (in relation to securities – ie, shares) a company must issue “all appropriate certificates or other title documents in connection with the security” (within 2 months of an allotment or within 1 month of receiving a transfer) – obviously catering for uncertificated companies (listed or otherwise). There is nothing in the Act like “a company must issue a share certificate unless it is listed”.

So, in summary, the issue of actual share certificates to evidence a holding, even for an unlisted company, appears to be no longer necessary. However, as with the boards of some other companies, my suggestion is that whilst it might be resolved to move to an uncertificated register, should any shareholder specifically ask for a certificate we should readily oblige.

I recommend a move to issuing Holding Statements and, in contemplation, I have drafted a sample letter and Holding Statement for your consideration – see below.

*Originally written by Company Secretary, an Australian virtual company secretary service.

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