Renounceable Documents

Renounceable documents refer to temporary evidence of ownership, of which there are three main types listed below:

When a company offers shares to the public, it sends an allotment letter to the successful applicants; if it makes a rights issue , it sends a provisional allotment letter to its shareholders or in the case of a capitalization issue, a renounceable certificate.

All of these are in effect bearer securities, and are valuable. Each includes full instructions on what should happen if the holder wisher to have the newly issued shares registered in their own name, or if they wish to renounce them in favour of somebody else.

See Also: Online share dealing service Stockmarket Centre

Last Updated: March 2008 © Moneyextra.com

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