Bearer instrument

Whoever physically holds the bearer document is assumed to be the owner of the property, and the rights arising therefrom, such as dividends.

The OECD in a 2003 report concluded that the use of bearer shares is "perhaps the single most important (and perhaps the most widely used) mechanism" to protect the anonymity of a ship's beneficial owner.

In the United States, under the Uniform Commercial Code, a negotiable instrument (such as a check or promissory note) that is payable to the order of "bearer" or "cash" may be enforced (i.e. redeemed for payment) by the party in possession.

Bearer shares are banned in some countries because of their potential for abuse, such as tax evasion,[3] movement of funds, and money laundering.

[5] Bearer shares were abolished in the United Kingdom under section 84 of the Small Business, Enterprise and Employment Act 2015 (SBEE).

However, Law's mercantilist policies saw him seek to establish large monopolies, leading to the Mississippi bubble.

Despite the first unfortunate experience, this form of participation in the joint-stock company as the acquisition of certificates of bearer shares became quite widespread in Europe.

Bearer shares are called securities, an anonymous holder of which is recognized from the legal point of view as a full-fledged shareholder of the company with all relevant rights.

The first and most important condition for the issue of bearer shares is the fact that this right should be provided by the legislation of the country of registration for this type of company.

Their main claim was not even that there is preferential taxation in low-tax areas, but lack of transparency: there are no open registries, no indication of who really owns the companies.

Recommendations of the FATF establish measures to ensure the transparency of legal entities with a view to obtaining competent authorities access to information about the beneficial owner at any time.

Changes in the legislation of offshore jurisdictions within the framework of these recommendations are most often related to the open register of shareholders and directors, cancellation of bearer shares, and information cooperation with management and control bodies.

In a number of low-tax jurisdictions, bearer shares were banned (Bahamas, Isle of Man, Jersey, Mauritius).

Since at present information on holders of certificates of bearer shares is often needed to disclose even to one person, confidentiality can be called imaginary.

Another advantage - the simplicity of transferring certificates of shares to the bearer is now also becoming more likely to become a drawback, namely, the insecurity of the owner from theft or loss.