Interim share certificates

An interim certificate must also reproduce the particulars of the share it replaces, because it performs the functions of that share until it is issued. As Professor Ognyan Gerdzhikov explains in his Commentary on the Commerce Act, the certificate not only evidences membership of the company and identifies its holder as the person entitled to exercise the shareholder’s rights, as provided by law; it also serves as a receipt for the shareholder’s capital contribution. It is therefore issued only in the holder’s name. It follows from Article 187(2), read together with Article 185(2) of the Commerce Act, that it cannot be a bearer instrument. The purpose is to ensure payment of the full contribution due, since shareholders generally pay only part of it when a company is formed. This follows from Articles 174(1)(3) and 178(3) of the Act: it must be possible to establish whether the holder of the interim certificate has paid the contribution in full or only in part. That would be impossible with a bearer certificate. Article 179(1), second sentence, also supports this conclusion. It requires the company to keep a register of interim certificates, without distinguishing between bearer and registered shares under the rules discussed here. Relevant decisions of the Commercial Chamber of the Supreme Court of Cassation include Order No. 247 of 23 April 2009 in interlocutory commercial case No. 79/2009, Second Division; Judgment No. 137 of 31 March 2005 in commercial case No. 635/2003, First Division; Judgment No. 34 of 31 March 2005 in commercial case No. 415/2004, Second Division; Judgment No. 43 of 15 May 2015 in commercial case No. 892/2014, Second Division; and Judgment No. 1024 of 12 December 2005 in commercial case No. 289/2005, Commercial Chamber.

If you need legal advice about companies, bearer shares or interim share certificates, it is advisable to consult a commercial lawyer.