An action to the carrier is one where the owner is who owns the physically title. And therefore, there is no name of the owner in it.
It is a type of title issued by a company or company, where there is no name in the company’s social books. Contrary to what happens with registered shares, where there are records in the company’s books. It will then be the holder of it, the one that proves to be the owner.
A bearer share facilitates the work to the companies that issue them. Since its transmission in much simpler than the registered shares. Simply, it would be enough with the exchange of the title, without having to make notes in the mercantile registries.
Advantages of a bearer share
Bearer shares have a number of advantages in relation to other types of actions. Let’s comment on the main ones:
- Simplicity in its transmission. The transfer from one owner to another is done much faster than registered shares. Well, with the simple “change of hands” is enough. In registered actions it is necessary to introduce some records in the books of the company, so the transmission time is longer.
- Cost reduction. The lack of legal registration means that costs are reduced in relation to other actions than if they have that obligation.
- Anonymity of the owner. Since there is no record of the action, the owners of these actions are not known in principle. And therefore, neither to the participation it may have in the company.
Disadvantages of a bearer share
Due to the degree of opacity that this type of actions has, the limitation of its operations has been increasing over time. Above all, the non-ownership of these types of titles has created both legal and banking restrictions. However, the limitations created have the same focus, the fight against money laundering .
Let’s see below some of the disadvantages for the holders of this type of actions:
- Limitation of its flexibility. Due to the constant fight against money laundering and tax fraud, the use of these actions has been limited. Even in those countries known as tax havens. With the aim of registering the change of owner of the action, it is decided to immobilize it. That is, it is deposited in a financial entity. Which is a detriment to its rapid transmission from one owner to another.
- Bank Limitation Banking entities also make a strong effort to prevent money laundering. In this sense, banks usually avoid having as clients, companies that have capital issued in bearer shares. Due to the lack of identity of the owner of those actions. And in the event that they accept these types of customers, the solution to this is what was mentioned in the previous disadvantage. That is, the shares are deposited in the bank, and thus have greater control over them.