Overview of a Share Power

What is a Share Power?

A Share Power is a legal form used to transfer the ownership of shares from one entity to another entity. While transferring Share Power from multiple companies, you need to have a different share power form. Pursuant to the Share Vesting Agreement, the person to whom shares have been issued (i.e., the purchaser) is required to execute a Share Power and deliver the document to the company issuing the shares.

How to transfer ownership of shares?

For transferring shares, you need a transfer of ownership form that needs to be signed by the owner who wants to transfer the shares, in the presence of a guarantor. A guarantor can be a person or any financial institution. After transferring, the new owner can ask for a share certificate that will validate them as valid owners of that share.

What are the things included in a Share Power form?

A Share Power is a legal tool that is used to transfer the ownership of shares. These are the components of a share power form: i.e.;

Previous Owner Information: The name, address, and contact number of previous owners of the shares should be clearly written in order to minimize the risk of fraud.

Description of shares being transferred: This includes the description of each share that is being transferred to a new party. e.g.; quantity of shares, current value, and company it belongs to.

Shares Certificate: A Share Certificate is a written document that evidences the buyer’s title for holding the respective company shares. Having a share certificate will give a strong legal footing to the new owner of shares in case of any dispute arise in the future.

Cost of the Shares: This includes the market value of shares that are being transferred to a new owner. Date of transfer: This includes the date on which the share power of attorney is transferred to a new person or entity.

What is the importance of a Share Certificate?

A Share Certificate acts as legal proof of shareholding in a particular company. When an individual or a business bought some shares in a company, they will be provided with a receipt of that purchase commonly known as a Share Certificate. Having it in place will give you a strong legal footing and also helps to settle down the dispute in the case it arises in the future.

What is a Share Vesting Agreement?

Share vesting is the process by which an employer grants equity in the company to employees (accrued rights overstock and assets), as a means to incentivize them to perform with established standards and remain with the company. If the employee is no longer with the company, his or her shares not yet vested will be bought back at a nominal fee or at no cost, as per the Share Vesting Agreement.

Conclusion

A Share Power is a legal tool that is used to grant legal power of attorney of shares to a new person or entity. It mostly requires a signature guarantee to protect from fake transfers. It is also referred to as a security power form. Share power is generally needed for the transfer of physically held shares and it may also be needed to change the name on the account or add a transfer on the death beneficiary.

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