PALO ALTO, Calif., Dec. 11, 2013 (GLOBE NEWSWIRE) -- As the issuance of shares electronically has gained traction in crowdfunding and venture capital, eShares has looked to independent outside experts for advice on the legality of electronic share certificates. As leading experts in securities and corporate law, DLA Piper has reviewed the topic and issued a memorandum finding that electronic stock certificates satisfy all the formal requirements and are permissible under Delaware law.
"We've developed a disruptive technology in an industry that hasn't seen much change in decades," said Henry Ward, CEO of eShares. "Rather than wait for outsiders to question the legality of issuing stock certificates electronically, we proactively engaged with DLA Piper to investigate the current law. Their memorandum is reassuring support as we start creating a new standard for electronic stock certificate issuance."
Founded in 2012, the eShares platform saves money and time for companies, law firms and investors by making it easy to issue and manage electronic shares in one registry. Once a company is on the platform, certificates are issued electronically in just seconds and all stakeholders are able to access the information at any time.
"eShares has made it possible for me to spend less time on paperwork and cap table administration," said Juanjo Mata, COO of leading collaborative software company Teambox. "I never doubted the legality of the platform but it's good to have this confirmation as we use them more and more to manage our shareholder base. I can't imagine going back to the old way of doing things."
A growing portfolio of users have gravitated towards the new technology, and issued more than 500 million certificates to date. Current users of the platform include law firms Perkins Coie, WilmerHale, and Gunderson Dettmer; venture firms K9 Ventures, Subtraction Capital and Expansion Venture Capital; and companies like aisle411, MobileSpan and LocoMotive Labs.
"In summary, our conclusion is that all of the required attributes that a stock certificate must possess under Delaware law can be satisfied in electronic form. There are no statutory requirements that would preclude use of an electronic medium for certificated shares. And the modernization of laws in regard to written instruments more generally also support the conclusion that electronic versions of stock certificates are permissible, and not precluded, under Delaware law." said Curtis Mo, Partner at DLA Piper.
To learn more about eShares, please visit www.esharesinc.com.
eShares manages the relationship between companies and their owners replacing paper certificates with electronic shares. The cloud-based technology makes it easy for private companies to eliminate paper certificates in seconds and has already issued more than 500 million shares since launch. For companies, eShares provides high-level financial insight and reduces legal costs. For investors, it is easier to manage investments in one easy-to-use dashboard. For law firms, time spent on process management and auditing is eliminated, making it possible to focus on better serving the client. Founded in 2012, the company is based in Palo Alto, CA.