May a Texas entity issue stock or other ownership interest in bearer form?
No. Section 3.202(f), which prohibits ownership certificates in bearer form, was added to the Texas Business Organization Code (TBOC) September 2009. "Bearer form" means that the certificates have no registered owners - they are owned by any party who "bears" the certificate. This provision to the TBOC was added in part because law enforcement officials objected to parties being able to disguise the actual ownership of business entities through the use of bearer ownership. Bearer certificates might also make theft of certificates easier. For example, although it involved debt rather than equity, it was the theft of bearer bonds that was at the heart of the plot of the movie Die Hard. Had the bonds been issued in registered form rather than bearer form, Bruce Willis's character might have had a much less eventful Christmas holiday.
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