(Go to Part 1 if you haven’t read it)
Information that must be provided to the authorized custodian
Those in possession of bearer share certificates must provide to the authorized custodian, at the moment of handing the certificates over in custody, the following information as a minimum:
- Full name, identification details and contact details of the owner or owners of the bearer shares in question, and
- Full name and contact details of the registered agent of the issuing corporation.
The above-mentioned information must be provided by written sworn declaration.
Transfer of the property over the bearer shares
Transfer of ownership over the bearer shares under custody shall be made as follows:
- The owner must notify the transfer to the custodian, and
- The assignee must deliver to the custodian the sworn declaration containing his full name, identification particulars and contact details.
Inheritance rules applicable to bearer shares under custody
Law 47 introduces a positive innovation in the sense that, if the owner of bearer shares under custody has given written instructions to the custodian, establishing who shall receive the shares in ownership in the event of death of the owner, such instructions shall be valid and will have prevalence over any right of succession, either testamentary or intestate. Thus, no probate shall be required, as long as the owner has given valid instructions to the custodian regarding disposition of ownership of the shares.
However, if the owner dies without having given instructions for the event of his death, then the relevant succession rules, testamentary or intestate according to the case, will apply.
What will be the legal consequences for bearer shares not deposited with an authorized custodian within the timeframe mandated by Law 47?
Simple: the owner will not be able to exercise the voting rights or the economic rights inherent to the shares in question. In effect, those bearer shares not in compliance will become void.