The naked truth about BEARER SHARES

May 29, 2013 - by Nida U.
Bearer Shares

Little background on what is that in general?

A bearer instrument (aka bearer share) is a document indicating that the owner of this document has title to property, so who physically holds the bearer share is assumed to own the property. For this reason the main benefit is the ability to quickly and anonymously transfer the ownership of the shares.

How it works in reality:
• In British Virgin Islands the law requires for all bearer shares to be „immobilized”, this means that all Bearer Share Certificates must remain with licensed custodian, moreover together with a written indication.
• In Belize the same scenario, all bearer shares must remain in custody with the Registered Agent, and the same way together with information indicating who the actual owners of the bearer-shares are.
• In Seychelles, very similar, but a nit better! In this case bearer shares don’t have to stay with the Registered Agent or Licensed Custodian, but the Registered Agent of the company must create and keep a Register of Bearer Shares, where the names and addresses of all individuals, to whom the bearer shares have been issued, are recorded! A subsequent transfer of a bearer share will not be effective until the name of the new holder of a bearer share is recorded in that Register.

So, funny enough, based on these requirements, even if you incorporate company with bearer shares, in two cases you will never actually get to see them and in all three cases information of who holds the „share” will be right there!

What is the point in this case? None really!

Usually under services we count down benefits, but in this case I can point out some DISADVANTAGES:
• The actual benefit of having bearer shares is lost.
• Use of the bearer shares is very limited.
• Besides, you pay more, as government fees are higher for companies with bearer shares.
• In case of BVI, you also pay a fee for Licensed Custodian services.
• Most banks in the whole world refuse bank account openings for companies that have bearer shares.

Thank you for reading my post! And you are welcome to leave comments, feedback, suggestions for other posts or contact me for more information.

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