Certificate Stock
The stock certificate can be described as a document that reflects the legal ownership of stocks of a person in a particular company or corporation. Thus, by means of stock certificate, a person can easily come to know how many shares etc he is holding in a particular company. This number is specific and the ownership of a person in the company is limited to this number only. Stock certificate is very important because it is the stock certificate only that confers various rights to a person in a company. The certificate, on the other hand, is a formal declaration of a particular fact that is made by a competent person on the behalf of company. Thus, stock certificate is issued by a company, which empower him all the rights of shareholders limited to a particular quantity of stock. Let us now discuss the various types of aspects related to stock certificate.
VARIOUS ASPECTS OF STOCK CERTIFICATE
There are many aspects related to stock certificate that need to be understood properly regarding the stock certificate. First of all, most of the stock certificates are negotiable. This means that these can easily be transferred in the name of another person. It is quite obvious that the stock certificate is transferred to another person only when he makes payment for it, i.e. buys the specified number of shares in the stock certificate. The other aspect that needs to be understood here is that there are some uncertified shares also. There is no stock certificate that is issued for these shares and mostly these stocks are maintained on the records of transfer agent. These are also called as book shares. There are also bearer stock certificates that are issued to the shareholders. This type of certificate is the property of a person who possesses it and thus, there is no name of a particular person written on such certificates. Any person can possess these certificates and can become the owner of shares mentioned in the certificate.
Also, there is no record of such stock ownership that is maintained by the company that has issued such stocks. The stock certificate is regarded a legal document and as said above, it certifies the total number of shares that are held by the person. There are also some stock certificates that contain the fraction of stocks also. In case of large corporations, the buying of stocks does not get a person stock certificate always, especially when the number of shares that have been bought is small. As far as the voting rights are concerned, the stock certificates like share certificates provide voting rights to a person in the annual general meeting of shareholders. There are also many companies that allow for proxy voting. This means that the person holding the share certificate can nominate any other person to vote on his behalf. The voting rights that are conferred to a person depend upon the charter and corporate law of company. There are two types of stock certificates that are normally found in the market. These are the bearer stock certificates and the registered stock certificates. We have already discussed about the bearer stock certificates. In case of registered stock certificate, the name of the stockholder appears on the name of stock certificate that is issued by the company. In the present times, the bearer stock certificates have become quite uncommon. They used to be in force in the offshore jurisdictions as they provide confidentiality to the holder of such certificates. The bearer stock certificate also allows a person to transfer the title over the number of shares without paying any stamp duty. But due to various international initiatives has led to these certificates to become obsolete. Let us now discuss what are the various steps that have to be taken when the stock certificates are lost or stolen.
WHEN STOCK CERTIFICATES ARE LOST OR STOLEN
There are many cases observed when these stock certificates are lost or stolen. Various brokerage firms, transfer agents, companies have adopted different types of procedures to help the various investors that have lost their certificates or when they are stolen. If a person has lost or accidentally destroyed his stock certificate or when it is stolen, he should immediately contact the transfer agency appointed by the company. He is also required to make a special request called as ?stop transfer?, which has to be placed by the transfer agent against the missing stocks. The stockbroker of a person can easily help him in this matter and it can assist him in different procedures in the process. The stop transfer request mentioned above helps a person to prevent the transfer of stocks to another person ?s name. The transfer agent reports the missing stock certificates to the appropriate forum. While getting the mail also, a person is required to be vigilant.
The stock certificates are normally sent through registered or certified mail and if a person does not receive the stock certificates in time, he should immediately contact the office from where these were sent. There are also some companies that send these stock certificates by way of regular mail and in such cases, there is every likely of stock certificate getting misplaced. Thus, a person can easily get a new or duplicate stock certificate for his lost or stolen stock certificates. To issue new or duplicate stock certificates, there are some requirements of issuing company that have to be fulfilled. These requirements include providing the facts regarding the loss of certificate in the form of affidavit, indemnity bond purchased by owner to protect the company as well as the transfer agent etc. This is done in order to assure that the lost certificate is not represented by any person later or an innocent purchaser. In case, a person finds the missed or lost stock certificates, information about the same must be made to the issuing authority.
THUS, STOCK CERTIFICATES ARE IMPORTANT
After going through the above discussion, it can be rightly said that the stock certificates are very important as they confer different types of rights to a person. In case, a person has lost or destroyed these certificates due to some reasons, he can easily get these issued from the company or the transfer agent.
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