Legal alert no. 25

Ban of the Issuance of Bearer Shares

On May 3rd, 2017, it was published, in the Portuguese Official Gazette, Law n. 85/2017 which bans the issuance of bearer shares and, consequently, amends the Securities Code (“CVM”) and the Commercial Companies Code (“CSC”).

In this context, the issuance of bearer shares is expressly banned from May 4th, 2017, date of the entry into force of the present law.

The referred law also foresees a transitional regime aiming to the conversion into registered shares, of the bearer shares, existing on May 4th, 2017.

Therefore, and regarding the existing bearer shares, the following aspects should be highlighted from the law published today:

  1. They must be converted into registered shares within six months after the entry into force of the present law;
  2. From the end of the sixth month after the entry into force of the present law:
  1. The bearer shares can no longer be transferred;
  2. The right to participate in the distribution of profits associated to the bearer shares is suspended.

It should also be noted that, in accordance with article 3 of the referred law, the Government must establish, within a maximum of 120 days (from May 4th, 2017) a regimen applicable to the conversion of the bearer shares into registered shares, which shall materialise the new legal framework now approved.

To access the full version of Law n. 15/2015, of May, 3rd, please click on the following hyperlink:

Did you find this useful?