S.185 and the mystery of share certificates

Ever as controversial as a condom in the Vatican toilet, Corporate Blawg has learnt that section 185 of the Companies Act 1985 requires companies to send to shareholders a share certificate within 2 months of allottment.  However, there is no such requirement to issue a share certificate if stated as a condition of issue.  This provision is repeated in section 769 in the Companies Act 2006.
          Corporate Blawg understands that a share certificate is prima facie evidence of ownership of a share, and is strong evidence of title, but when a company is issuing shares out of the goodness of its heart (e.g. to employees) why bother sending them the certificate?  Apparently it is common in the U.S. for a nominee company to hold onto the share certificate but less so in the U.K. 
          Corporate Blawg questions the purpose behind sending out share certificates...

• the Company would still have to notify the shareholder of its ownership of the shares, so not issuing a share certificate hardly affects the administrative burden on the company;
• if the Company needs to enforce a compulsory transfer of the share, it may do this whether or not the shareholder has his certificate;
• where there is conflict between the register and the share certificate, the register prevails.

So it seems that there is only one tangible benefit of issuing a share certificate, which is that it is stronger evidence of title than a letter of allotment (and in Corporate Blawg's view this difference does not, in real practical terms, have much effect).  Since companies can simply avoid the requirement to send out share certificates, Corporate Blawg considers such certificates to be archaic and as relevant to current market practices as the Catholic church's view on contraception.  The only explanation for issuing a share certificate must be that such a certificate looks quite nice, and has the potential to be discovered under the bed of a dead shareholder.  Happy days.
           Harrumph.

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Apparently it is common in the U.S. for a nominee company to hold onto the share certificate but less so in the U.K.

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