Stock certificate

In corporate law, a stock certificate, also known certificate of stock or a share certificate, is a legal document that certifies ownership of a specific quantity of shares of stock in a company. When dealing with large companies, a physical stock certificate is not always issued when stock is purchased.

In the United States, electronic registration of shares is becoming more common than the stock certificate. Firms are no longer obligated to provide paper records, and nearly 420 of the seven thousand publicly traded securities no longer do. A broker can charge up to five hundred dollars for supplying a paper certificate, however this payment can be circumvented by recording stocks with the stock transfer agent directly and asking them the issue of certificate.

Let’s take the example of Sweden, where share certificates have been almost entirely eliminated, individuals use electronic shares almost exclusively. These electronic shares are registered in the stock owner’s name or in the stock owner’s broker’s name. In Sweden there are a few instances where share certificates are in use, but only in the case of shares that are not listed on any stock exchange in Sweden. These share certificates have no relationship with voting rights, and an owner of Share certificates can give proxy to another person to vote on his behalf.

There are two types of Stock Certificates: registered stock certificates and bearer stock certificates. Bearer Stock certificates, as the name suggests, belong to the person who holds those certificates. The Bearer Stock certifies physical possession of the certificate andentitles the holder to exercise all legal rights associated with stock. This type of stock is rarely in practice at the present, and there are various laws that now help to remove the bearer stock certificate.