What is a Stock Certificate

A stock certificate is issued by companies in which investors have bought equity shares. The number of shares owned by the investor is mentioned in the stock certificate. A stock certificate is actually a hard copy of the shares bought and is being replaced by electronic certificates now-a-days. The following are the details regarding stock certificates.

What should be kept in mind while applying for stock certificate?

  • Stock certificates are categorized into two – Registered Stock certificates and Bearer stock certificates.
  • Companies do not issue a stock certificate every time shares are bought. They are normally issued on the first time shares are issued.
  • Only shares are mentioned in the stock certificate. Any securities bought would not be mentioned in the same.
  • Stock certificates are slowly getting obsolete and outdated. Possession of stock certificate does not given the power to vote. Proxy giving is allowed during votes and stockholders who do not have the stock certificate are also allowed to vote.
  • A registered stock certificate mentions the stockholder percentage of title whereas a bearer stock certificate can be used as a powerful tool to take any legal action by the stockholder.
  • Stock certificate contains important information such as the name of the stockholder, the number of shares owned, a unique identification number as a stock holder, along with the company seal and signature by the financial management.
  • The stock certificate is written on an engrossed paper with unique background that proves the authenticity of the stock certificate. This also prevents anytime from issuing improper stock certificate in order to mislead and cheat the investor.
  • If a stock certificate is lost, a new stock certificate is issued at a payment of fine. Generally the company keeps track of all its stock and stock holders in an electronic format.
  • The signature in the stock certificate is not printed but is an original signature.

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