CHAPTER X 
SHARE WARRANTS 
A Share Warrant is a document under the seal of the 
company to the effect that the bearer is entitled to the 
number of fully paid shares of the company stated therein, 
the distinguishing numbers being specified (Appendix F, 
Form 40). A share warrant is by mercantile usage and 
by virtue of s. 70 (3) of the Companies Act, 1929, a negotiable 
instrument transferable by mere delivery, that is to say, 
it may be passed from hand to hand, and a bond fide holder 
for value for the time being is entitled to the benefit of it, 
notwithstanding some defect in title, e.g. theft by a previous 
holder. The statutory law relating to share warrants is 
contained in ss. 70, 97, 141 (2) of the Act. 
Share warrants may be issued in respect of any fully paid 
up shares or stock by any public company limited by shares 
which is authorised so to do by its articles. A private com- 
pany’s articles of association must not take power to issue 
share warrants, as otherwise it cannot limit its membership 
in accordance with the requirements of s. 26. 
Conditions of Lhe conditions governing the issue of share warrants are 
Issue. settled either by the company’s articles of association or by 
resolution of the board of directors, passed pursuant to some 
provision in the articles. 
Sometimes the conditions are printed on the back of the 
warrant, but it is more usual to print them separately and 
to issue them on application. The holder can then keep his 
conditions of issue by him, while he will probably lodge his 
warrant with his bank for safe custody. This course also 
enables the company more easily to vary the conditions 
subsequently, if it should become desirable to do so. 
It is highly important to guard against forgery, and the 
warrants should therefore be printed on paper bearing a 
distinctive water mark. It is desirable that the printing 
should be done direct from a steel plate which cannot easily 
he imitated. 
[LL