The following Banking & Finance practice note provides comprehensive and up to date legal information covering:
Shares are commonly offered as security for a loan.
In commercial lending transactions, shares are typically offered as security:
as part of a package of security over the whole of a company's assets (see Practice Note: Key features of debentures)
where the borrower is a special purpose vehicle and the lender wants to have the ability to take control of the borrower and its whole business on enforcement (see Real Estate Finance—overview, Practice Note: Security in project finance transactions and Practice Note: Security and guarantees on acquisition and finance transactions), or
for stamp duty or other tax reasons (see Practice Note: What does stamp duty apply to?)
This Practice Note explains the key issues that arise when taking security over shares. In particular it considers:
the types of shares that may be secured
the relevant types of security used in respect of shares
key terms of the relevant security documents, and
perfection and priority of security over shares
This Practice Note focuses primarily on taking security over certificated shares. For detailed information on taking security over uncertificated shares, see Practice Note: Taking security over uncertificated shares held in CREST.
A share is an intangible asset and is sometimes described as a 'bundle of rights and obligations'. The rights and obligations are determined by the Companies Act 2006 (CA 2006), the constitutional documents of
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
The Standard Conditions of Sale (SCS), currently in their 5th edition (2018 revision), are a set of standard conditions which are commonly incorporated into contracts for the sale of residential property. The Standard Commercial Property Conditions (Third Edition—2018 Revision) (SCPC) are used for
This Practice Note considers the question of when court proceedings can be stayed. It identifies scenarios in which a party may apply for a stay of proceedings, including to allow for: a jurisdictional challenge; arbitration; an attempt to settle; related criminal proceedings; an opportunity to
What is 'discontinuance'?Discontinuance is the means by which a claimant can bring all or part of the proceedings it has instigated to an end.A claimant has a right to discontinue all or part of a claim at any time.Where proceedings are brought to an end without an order or judgment from a court, eg
Private nuisancePrivate nuisance is an unlawful interference with a person's use or enjoyment of land or some right over or in connection with it. Interference must be unreasonable, and may be caused, eg by water, smoke, smell, fumes, gas, noise, heat or vibrations. Where the defendant has not
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.