CAMS Question #272: Real Exam Question with Answer & Explanation

The correct answer is D. easily transferred so the holder claims ownership.. Bearer shares are unregistered equity securities owned by the possessor of the physical share documents. The issuing company does not record the identity or ownership of the shareholders, nor does it track the transfers of ownership. This means that the holder of the bearer share

Question

A benefit of using bearer shares in corporate formations is that bearer shares are:

Options

Awidely accepted in the financial world.
Bentered in the register of owners.
Cassociated with lower costs in setting up a company.
Deasily transferred so the holder claims ownership.

Explanation

Bearer shares are unregistered equity securities owned by the possessor of the physical share documents. The issuing company does not record the identity or ownership of the shareholders, nor does it track the transfers of ownership. This means that the holder of the bearer share can claim ownership and exercise the rights associated with the share, such as voting and receiving dividends, by simply presenting the physical certificate. This also makes the transfer of ownership very easy, as it only requires the delivery of the physical document, without any formalities or intermediaries. Bearer shares are therefore attractive for those who seek anonymity, privacy, and flexibility in their corporate structures.

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