Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Shares definition

What does Shares mean? In company law practice, a share is a unit of a member’s interest in a company, carrying the rights and obligations attached to its class (for example, voting, dividends and return of capital on a winding up). The Companies Act 2006 simply states that a share is a share in a company’s share capital; the Irish Companies Act 2014 adopts a broadly equivalent approach. Usage and effect are consistent across England & Wales, Scotland, Northern Ireland and Ireland. A company’s share capital comprises the number of shares it allots and issues to investors on or after incorporation. Those...

Taking, Perfecting and Enforcing Security over Shares in the UK: Legal and Equitable Mortgages and Charges, PSC Regime, Pensions Moral Hazard, NSIA and CREST

Published by a LexisNexis Banking & Finance expert

Practice notes

Shares are frequently pledged as security for a loan. In commercial finance deals, they are often taken as security:

as one part of a security package covering all of a company’s assets (see Practice Note: Key features of debentures)
where the Borrower is a Special purpose vehicle and the lender wants the option to take control of the borrower and its entire business on enforcement (see Practice Notes: Security in real estate finance transactions, Security in project finance transactions and Taking security in acquisition finance transactions—overview), or
for stamp duty or other tax-driven reasons (see Practice Note: What does stamp duty apply to?)

This Practice Note sets out the main issues when taking security over shares. In particular, it looks at:

the categories of shares that can be secured
the forms of security typically used over shares
key provisions in the relevant security documents, and
perfection and priority of security over shares

This Practice Note mainly addresses security over certificated shares. For comprehensive guidance on security over uncertificated shares, see Practice Note: Taking security over uncertificated shares held in CREST.

—what is secured?...

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Web page updated on 21/05/2026

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