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Stock Certificate Basics

When someone buys stock in your company, it's an exciting affirmation of success. Consider giving your shareholders Stock Certificates as evidence of their investment. Both you and your shareholders can use this Stock Certificate as proof of the purchase, and to help safeguard your legal rights.

Use the Stock Certificate document if:

  • You want to give a stockholder proof of purchase of stock.
  • You want to give new stockholders evidence of their ownership of stock shares that were issued by a newly-formed corporation.
  • You want to give a stockholder evidence of ownership of stock shares that were transferred to the stockholder from a former stockholder.

Corporations can give their shareholders Stock Certificates as proof of ownership of corporate stock. While a certificate lists the stock owner and the number of shares they own, it isn't the stock itself—rather, it's evidence that the shareholder actually owns the stock in question. When creating your Stock Certificate, you'll want to include information like: the name and location of your corporation, the stock purchaser, the stock certificate number, the number of shares, whether the stock has a minimum price per share (aka "par value"), whether you're issuing common or preferred stock, what (if any) transfer restrictions apply, and the date the stock will be issued. If your organization has a corporate seal, you'll can affix it to the printed Stock Certificate.

A stock certificate acts a bit like a receipt, if you're interested in the initial buying and selling of corporate stock our stock purchase agreement may be able to help.

What Are the Benefits of Stock Certificates?
One of the main benefits of issuing share certificates is documentation. While the financial industry has carved out a brand-new frontier in high speed, algorithm based, trading many individuals prefer to hold onto stock for longer than fractions of a second. For these long term investors, a stock certificate provides useful documentation of their company shares for their financial records. The original corporation can also benefits from the documentation of stock certificates.

How Are Stocks Held?
There are three ways in which stocks can be held:

• Physical certificate: in this manner, the stocks are registered in the name of the investor. All paperwork and any dividends are sent directly to that individual.

• "Street name registration:" the most common form of stock ownership, in this setup the stocks are registered under the name of a brokerage firm and the investor is listed as the beneficiary of the holdings in the firm's books. All company paperwork and dividends are sent to the firm which can then pass them on to the individual investor.

• "Direct registration" occurs when your name is registered in the stock issuer's records and the company itself holds the stock on your behalf. This type of registration is not always available. For more detail on stock holding, you can visit the U.S. Securities and Exchange Commission's FAQ.

Can I Personally Trade or Gift My Stock?
Yes, it's usually possible to trade or gift stocks you own to another individual. Doing so, however, requires more than simply passing along the stock certificate. Generally speaking, for paper certificates the bond holder will have to sign over the stock. Occasionally a paper stock will come with its own form to do just that. If not, the original investor will have to sign the stock over alongside a guarantor (typically the investor's brokerage firm). If the stock is held electronically, ownership can be passed by changing the title of the stock.

Stock options can be a trickier matter. Most of the time the eligibility to trade or sell these are strictly limited by a contract. Any change in ownership of these assets would have to comply with that contract language.

A stock certificate acts a bit like a receipt, if you're interested in the initial buying and selling of corporate stock our stock purchase agreement may be able to help.

What Are the Benefits of Stock Certificates?
One of the main benefits of issuing share certificates is documentation. While the financial industry has carved out a brand-new frontier in high speed, algorithm based, trading many individuals prefer to hold onto stock for longer than fractions of a second. For these long term investors, a stock certificate provides useful documentation of their company shares for their financial records. The original corporation can also benefits from the documentation of stock certificates.

How Are Stocks Held?
There are three ways in which stocks can be held:
• Physical certificate: in this manner, the stocks are registered in the name of the investor. All paperwork and any dividends are sent directly to that individual.
• "Street name registration:" the most common form of stock ownership, in this setup the stocks are registered under the name of a brokerage firm and the investor is listed as the beneficiary of the holdings in the firm's books. All company paperwork and dividends are sent to the firm which can then pass them on to the individual investor.
• "Direct registration" occurs when your name is registered in the stock issuer's records and the company itself holds the stock on your behalf. This type of registration is not always available. For more detail on stock holding, you can visit the U.S. Securities and Exchange Commission's FAQ.

Can I Personally Trade or Gift My Stock?
Yes, it's usually possible to trade or gift stocks you own to another individual. Doing so, however, requires more than simply passing along the stock certificate. Generally speaking, for paper certificates the bond holder will have to sign over the stock. Occasionally a paper stock will come with its own form to do just that. If not, the original investor will have to sign the stock over alongside a guarantor (typically the investor's brokerage firm). If the stock is held electronically, ownership can be passed by changing the title of the stock.
Stock options can be a trickier matter. Most of the time the eligibility to trade or sell these are strictly limited by a contract. Any change in ownership of these assets would have to comply with that contract language.


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Stock Certificate Basics

Corporations can give their shareholders Stock Certificates as proof of ownership of corporate stock. While a certificate lists the stock owner and the number of shares they own, it isn't the stock itself—rather, it's evidence that the shareholder actually owns the stock in question. When creating your Stock Certificate, you'll want to include information like: the name and location of your corporation, the stock purchaser, the stock certificate number, the number of shares, whether the stock has a minimum price per share (aka "par value"), whether you're issuing common or preferred stock, what (if any) transfer restrictions apply, and the date the stock will be issued. If your organization has a corporate seal, you'll can affix it to the printed Stock Certificate.

A stock certificate acts a bit like a receipt, if you're interested in the initial buying and selling of corporate stock our stock purchase agreement may be able to help.

What Are the Benefits of Stock Certificates?
One of the main benefits of issuing share certificates is documentation. While the financial industry has carved out a brand-new frontier in high speed, algorithm based, trading many individuals prefer to hold onto stock for longer than fractions of a second. For these long term investors, a stock certificate provides useful documentation of their company shares for their financial records. The original corporation can also benefits from the documentation of stock certificates.

How Are Stocks Held?
There are three ways in which stocks can be held:

• Physical certificate: in this manner, the stocks are registered in the name of the investor. All paperwork and any dividends are sent directly to that individual.

• "Street name registration:" the most common form of stock ownership, in this setup the stocks are registered under the name of a brokerage firm and the investor is listed as the beneficiary of the holdings in the firm's books. All company paperwork and dividends are sent to the firm which can then pass them on to the individual investor.

• "Direct registration" occurs when your name is registered in the stock issuer's records and the company itself holds the stock on your behalf. This type of registration is not always available. For more detail on stock holding, you can visit the U.S. Securities and Exchange Commission's FAQ.

Can I Personally Trade or Gift My Stock?
Yes, it's usually possible to trade or gift stocks you own to another individual. Doing so, however, requires more than simply passing along the stock certificate. Generally speaking, for paper certificates the bond holder will have to sign over the stock. Occasionally a paper stock will come with its own form to do just that. If not, the original investor will have to sign the stock over alongside a guarantor (typically the investor's brokerage firm). If the stock is held electronically, ownership can be passed by changing the title of the stock.

Stock options can be a trickier matter. Most of the time the eligibility to trade or sell these are strictly limited by a contract. Any change in ownership of these assets would have to comply with that contract language.

A stock certificate acts a bit like a receipt, if you're interested in the initial buying and selling of corporate stock our stock purchase agreement may be able to help.

What Are the Benefits of Stock Certificates?
One of the main benefits of issuing share certificates is documentation. While the financial industry has carved out a brand-new frontier in high speed, algorithm based, trading many individuals prefer to hold onto stock for longer than fractions of a second. For these long term investors, a stock certificate provides useful documentation of their company shares for their financial records. The original corporation can also benefits from the documentation of stock certificates.

How Are Stocks Held?
There are three ways in which stocks can be held:
• Physical certificate: in this manner, the stocks are registered in the name of the investor. All paperwork and any dividends are sent directly to that individual.
• "Street name registration:" the most common form of stock ownership, in this setup the stocks are registered under the name of a brokerage firm and the investor is listed as the beneficiary of the holdings in the firm's books. All company paperwork and dividends are sent to the firm which can then pass them on to the individual investor.
• "Direct registration" occurs when your name is registered in the stock issuer's records and the company itself holds the stock on your behalf. This type of registration is not always available. For more detail on stock holding, you can visit the U.S. Securities and Exchange Commission's FAQ.

Can I Personally Trade or Gift My Stock?
Yes, it's usually possible to trade or gift stocks you own to another individual. Doing so, however, requires more than simply passing along the stock certificate. Generally speaking, for paper certificates the bond holder will have to sign over the stock. Occasionally a paper stock will come with its own form to do just that. If not, the original investor will have to sign the stock over alongside a guarantor (typically the investor's brokerage firm). If the stock is held electronically, ownership can be passed by changing the title of the stock.
Stock options can be a trickier matter. Most of the time the eligibility to trade or sell these are strictly limited by a contract. Any change in ownership of these assets would have to comply with that contract language.

Use the Stock Certificate document if:
  • You want to give a stockholder proof of purchase of stock.
  • You want to give new stockholders evidence of their ownership of stock shares that were issued by a newly-formed corporation.
  • You want to give a stockholder evidence of ownership of stock shares that were transferred to the stockholder from a former stockholder.
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