Company share

Company share subdivision refers to the multiple ownership of property and is not strictly a subdivision. It does, however, have the same effect as a subdivision. Multiple ownership occurs through multiple holdings of shares in a company that in turn owns the freehold of land and any buildings that are constructed on it.

The certificate of title to the land is held in the company’s name, and remains un-subdivided. Purchasers then buy shares in the company and their shareholding entitles them to exclusive use of a particular property. The shareholders of the company will remain bound by the memorandum and articles of association of the company.

In Victoria, this type of subdivision is under the jurisdiction of The Transfer of Land Act 1958 (VIC), and other jurisdictions have equivalent legislation.

Note that many lenders do not favour company title and may not provide a loan against such a title.






What is the major disadvantage of subdivision through the company share method?