Lost share certificate

In a share sale the seller transfers the shares, and a certificate may be part of that. If it cannot be found, the corporation and the buyer need another route to a clean transfer. The statutes provide one: a replacement certificate, backed by an indemnity bond. See what to do when a seller cannot produce basic corporate records and the share certificate.

The federal rule

Under section 80(2) of the Canada Business Corporations Act, the issuer shall issue a new security in place of the original if the owner so requests before the issuer has notice that the security has been acquired by a bona fide purchaser, furnishes a sufficient indemnity bond and satisfies any other reasonable requirements the issuer imposes. Under section 80(1), an owner who fails to give the issuer written notice of an adverse claim within a reasonable time after discovering the loss is precluded from asserting against the issuer any claim to a new security if the issuer registered a transfer before receiving the notice. Under section 80(3), if a bona fide purchaser of the original later presents it for registration of transfer, the issuer must register the transfer unless that would result in overissue.

The Ontario rule

Section 92(1) of Ontario’s Securities Transfer Act, 2006 is similar: the issuer shall issue a new security certificate if the owner asks before the issuer has notice that a protected purchaser has acquired the old one, provides an indemnity bond sufficient in the issuer’s judgment to protect it from loss, and satisfies other reasonable requirements. Section 93 sets the notice rule. This entry covers the federal and Ontario Acts only.