Legal News | 19.05.26

Abolition of share certificates for listed and traded companies

Abolition of share certificates for listed and traded companies: what it means for UK companies and shareholders

The UK is moving toward a fully digital system of share ownership, with the abolition of paper share certificates at the centre of this reform.  Following the Digitisation Taskforce’s final report in July 2025, the government has confirmed its intention to legislate to remove certificated shares and replace them with digitised registers (maintained electronically, in a prescribed form) by the end of 2027.

This development represents one of the most significant changes to the mechanics of share ownership under the Companies Act 2006 in recent decades.  It will affect how shares are evidenced, transferred and, ultimately, how shareholders interact with companies.

The current position

At present, shares in UK companies can be held in two forms: certificated or uncertificated. Certificated shares are evidenced by a share certificate, a document issued by the company confirming that the named individual is a member in respect of a specified number and class of shares.

Alongside this, every company must maintain a register of members, which records the legal ownership of shares.  While the register is the primary record of title, a share certificate provides prima facie evidence of ownership and plays an important practical role in transactions.  Companies are generally required to issue certificates within two months of allotment or transfer, and they remain a familiar feature of corporate administration, particularly for private companies and long-standing shareholdings.

However, this dual system, paper certificates alongside electronic records, has increasingly been seen as inefficient.  Certificates can be lost, delayed, or forged, and they introduce additional administrative steps in what is otherwise a largely digital market environment.

The proposed reform

The government’s reform will abolish the issuance and legal status of paper share certificates for in-scope companies. In-scope companies include UK-incorporated listed/traded companies. currently private (ltd) companies are not currently described as mandatory participants.

In their place, companies will be required to maintain fully digitised share registers, which will become the sole evidence of ownership.

In practical terms:

• Companies will no longer issue physical certificates;
• Existing certificates will cease to have legal effect; and
• Share ownership will be determined entirely by entries on a digital register.

The target is to implement these changes by the end of 2027, with a single implementation date expected for affected companies.

This reform is only the first step to an overall process whereby the government is expected to move towards a fully intermediated system, where shares are held through custodians or nominees rather than directly on company registers.  Before that transition occurs, further measures will be introduced to strengthen shareholder rights and improve communication between companies and investors.

Why this matters

The abolition of share certificates is intended to modernise the UK’s capital markets and reduce inefficiencies.  For companies, the move to digital registers should streamline administration, reduce costs, and simplify processes such as share transfers and corporate actions.

For shareholders, the change removes the need to safeguard physical documents and should enable faster and more efficient transactions.  It also reduces the risk of issues such as lost certificates, which can complicate corporate transactions or estate administration.

More broadly, the reform aligns the UK with international trends toward dematerialisation, where securities exist only in electronic form.

Key legal and practical implications

One of the most important consequences is the shift in how ownership is evidenced.  Currently, a share certificate provides supporting evidence of title.  Under the new regime, the register alone will become the sole evidence to determine ownership, increasing reliance on the accuracy and integrity of digital records.

This has several implications:

• Transactions: Share transfers are expected to become fully electronic, removing the need for physical documentation and reducing delays.
• Disputes: Questions of ownership will depend entirely on the register, making rectification procedures more central.
• Security arrangements (such as charges over shares, pledges and condition precedent in acquisitions): Existing practices that rely on possession of certificates may need to be reconsidered, particularly in financing transactions.
• Administration: Processes relating to lost or replacement certificates will fall away entirely.

While the reform simplifies many aspects of share ownership, it also introduces new dependencies on digital infrastructure and intermediaries.

Looking forward

The government has made clear that the abolition of share certificates is part of a broader strategy to create a modern, efficient and competitive capital markets framework.

For businesses, it is a pertinent time now to start considering the practical impact of these changes, including reviewing internal share administration processes, ensuring readiness for digital register requirements, and considering implications for shareholder communications and governance.

For shareholders, particularly those holding long-standing certificated shares, the transition will require engagement to ensure holdings are properly reflected in the new system.

This article should not be relied upon as legal advice. If you would like specific legal advice, or require any assistance, then please get in touch: 020 4549 2460 or 01380 733300 | commercial@wansbroughs.com