Indemnity for Lost Share Certificate

Our Indemnity for Lost Share Certificate template (also covering damaged or destroyed share certificates) is for use by a shareholder or joint shareholders who have lost, damaged or destroyed a share certificate for shares in a limited company.

When and how to use the indemnity for lost share certificate

Use this template when either:

• You realise you have lost or damaged your share certificate and want a replacement; or
• You are selling your shares and buyer wants an indemnity in case the certificate turns up again.

The company which issued the shares may have its own set form for such an indemnity. In that case, you can ask the company to supply the necessary form. However, if not, then this template will cover what needs to be dealt with.

If the share certificate was missing, badly damaged or destroyed, then, unless such an indemnity is given, the company would not normally issue a replacement certificate. This is in case the old one came to light later on and then the owner tried to sell the same shares twice (whether deliberately or innocently).

Using this indemnity for lost share certificate template, the company has the assurance it needs that the original owner of the shares can be held responsible, for the lost share certificate, under the indemnity if there is any such mishap after a replacement certificate has been issued.

Therefore, the company can issue a replacement share certificate, and then the original owner can either:

• sell the shares now, or
• hang onto the certificate, ready for when they want to sell.

You can use this for any type of UK company that has issued shares, for example:

• a general trading company; or
• a property management company (flat management company).

For further explanation on how an indemnity works, see Wikipedia.

Clauses in our Indemnity for Lost Share Certificate template

Read on to get the gist of the contents of the indemnity for lost share certificate. This is an excerpt of the guide that accompanies the template when bought.

The first paragraph of the Indemnity for Lost Share Certificate

In the first paragraph on line 2, fill in the number of shares the certificate related to and the type or class of shares that they are. For example, they might be “Ordinary”, “A Ordinary” or “Preference” shares.

The second paragraph

The second paragraph is confirmation that:

• the owner is still the proper owner of the shares and
• the owner has not “encumbered” the shares in any way.

For example, the latter might be by way of:

• a chattel mortgage over them or
• the owner otherwise leaving share certificate with anyone by way of security.

The third paragraph

The third paragraph is the request for a replacement certificate and the indemnity that is given in respect of the lost share certificate. If the shareholder is trying to transfer or sell the shares at the same time, then choose the second option from the phrases in the first set of square brackets in the third paragraph and also keep the words in square brackets at the end of this paragraph. You would then deliver this indemnity to the company, along with a stock transfer form in the usual form in order to apply for the company to register the transfer of the shares. If the shareholder is not trying to transfer the shares at this time, then choose the first option from the phrases in the first set of square brackets in this paragraph and delete the words in square brackets at the end of this paragraph.

The fourth paragraph

The fourth paragraph is a promise to return the old original share certificate to the company immediately if it ever comes to light. The company would then return it to its register of share certificates, attaching it to the counterfoil for that certificate and writing “CANCELLED” diagonally all the way across it.

Signing the Indemnity for Lost Share Certificate

This indemnity needs signing. Type the name of the shareholder under the dotted line where indicated. If more than one shareholder holds the shares jointly, then fill in the name or names of the other owners. Where there are more than 2 joint owners, then simply add further dotted lines and the names below. If there is only one owner, then delete the second dotted line. Also delete and the space below it where you would otherwise fill in the name.

Once the shareholder(s) has/have signed the indemnity, date it on the top of the page. This should be with the date he/she/they signed it or a later date, but not an earlier date. The shareholder should keep a copy of the signed indemnity and give the original to the company. The company should then check the register of members. If everything is in order, the company will issue the replacement certificate.

You can fill out our lost share certificate indemnity template in as little as five minutes, with the help of our excellent drafting notes. The download includes them. All for a cost of just £9.95.

Shareholders agreement

If your company has more than one shareholder, but has no shareholders agreement yet, then please have a look at our shareholders agreement template. It is critical to have such an agreement in place when there is more than one shareholder in a company.

* You may wish to check first with any Stock Market listed companies what form of indemnity or other process they need you to follow if you have lost a share certificate for shares in their company. They may have their own preferred form.