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Promissory Note For Shares for the United Kingdom

Promissory Note For Shares Template for England and Wales

A Promissory Note For Shares is a formal written promise to transfer specified company shares at a future date or upon certain conditions. Under English and Welsh law, it combines elements of traditional promissory notes with share transfer regulations, creating a legally binding commitment to deliver specified shares. The document must comply with both the Bills of Exchange Act 1882 and the Companies Act 2006, ensuring proper execution and enforceability within the jurisdiction.

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What is a Promissory Note For Shares?

A Promissory Note For Shares is commonly used in corporate transactions where immediate share transfer is not practical or desired. This document type is particularly relevant in England and Wales, where it must comply with specific legislative requirements including the Companies Act 2006 and financial services regulations. The Promissory Note For Shares typically includes details of the shares to be transferred, payment terms, conditions precedent, and execution requirements. It's particularly useful in employee share schemes, corporate restructuring, and investment scenarios where deferred share transfers are necessary.

What sections should be included in a Promissory Note For Shares?

1. Date and Parties: Identification of maker and payee of the note

2. Promise to Pay: Unconditional promise to pay a specific number of shares

3. Share Details: Description of shares including class, nominal value, and company details

4. Payment Terms: Timeline and conditions for share transfer

5. Signature Block: Execution provisions for all parties

What sections are optional to include in a Promissory Note For Shares?

1. Security Provisions: Additional provisions required when the note is secured against specific assets

2. Transfer Restrictions: Provisions limiting or restricting the transferability of the note

3. Default Provisions: Specific remedies and consequences in case of default on the note

What schedules should be included in a Promissory Note For Shares?

1. Share Certificate Details: Copy or details of relevant share certificates

2. Payment Schedule: Schedule of payments or transfers if to be made in installments

3. Company Information: Details of the company including share capital structure and relevant corporate information

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions



























Clauses

























Industries

Companies Act 2006: Primary legislation governing company law in the UK, covering share issuance, transfer, share certificates, directors' duties, share capital requirements and pre-emption rights

Financial Services and Markets Act 2000 (FSMA): Key financial services legislation covering regulations for financial instruments, financial promotion restrictions, and requirements for regulated activities

Bills of Exchange Act 1882: Historic legislation that sets out the basic requirements for negotiable instruments, including form and content requirements for promissory notes

Consumer Credit Act 1974: Legislation that may apply if the promissory note involves individual shareholders rather than corporate entities

Financial Services and Markets Act 2000 (Financial Promotion) Order 2005: Specific regulations regarding restrictions on financial promotions, including relevant exemptions and requirements

FCA Handbook: Regulatory guidelines and requirements that may apply if the shares are in a regulated entity

Stamp Duty Legislation: Tax considerations including Stamp Duty Reserve Tax (SDRT) and stamp duty on share transfers

Common Law Principles: Fundamental contract law principles and established case law regarding negotiable instruments

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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