Top Things to Understand About Corporate Stock Certificates

Buying and selling stocks used to be the domain of registered stockbrokers. Movies like Boiler Room or The Big Short show people in suits shouting themselves hoarse. But now you can buy stocks on your smartphone. You even have the option of using an online brokerage or doing it yourself.

People who buy a share of a company are often issued corporate stock certificates. These written documents provide legal proof of an individual’s ownership of a share. They’re also called share certificates.

Stock certificates have a long history. They’ve been around for centuries. The first one was reportedly issued back in 1606. It was for the Dutch East India Company. These days, most stock certificates have gone digital. They’re often recorded via an electronic process known as a book-entry form. There are other things you should know about a cert stock.

Ownership is Forever

Stock certificates never expire. It will remain valid forever. Or as long as the company operates. The value of shares of a business that closes will depend on the circumstances. If the company folded due to bankruptcy, your shares will have zero value.

It’s different if the company merged with another corporation. Your share could become valuable. You must speak to the new owners and verify if they will honor your investment.

Lost Certificates Can Become Found

Many shareholders have experienced losing their stock certificates. These might have become misplaced or stolen. Others could have become damaged beyond repair. The good news is you can still secure a new physical certificate. You must move fast though. Contact your transfer agent and have them work on a replacement.

The agent will do a “stop transfer” to protect your shares. They will notify the company about the loss. This will prevent someone else from claiming your shares. You’ll have to submit an affidavit of loss and other documents.

No Need for Physical Certificates

Most companies no longer issue physical share certificates. The Walt Disney Company was one of the last to do so. The company issued its final paper share certificates in 2013. The documents have become collector’s items since then.

Companies no longer do this because everything is electronic. Shares are all registered in digital form by the issuing company. Digitalization is safer and more cost-effective. It’s also an efficient and effective way of managing stocks.

There are thousands of people who want to have a physical certificate though. They’ll have to request a copy from the company. This can become done in a direct manner or via a lawyer. They can also request this from a transfer agent.

Old Certificates are Now Collector’s Items

Have you found a yellowing stock market certificate among your grandfather’s things? It can be worth a lot. The shares might still be active. So your first job is to double-check its value.

Some outdated share certificates might have zero value. This can be because the company no longer exists. But the fancy ones are still worth a lot to collectors. An 1867 certificate from the Union Pacific Railroad Land was then auctioned off a short time ago. The initial bid for the document started at $70,000. Certificates that have an unusual design could fetch more.

Transfers are Also Allowed

You can transfer your share and even your stock certificate to another person. The process isn’t as simple as giving the stock ownership certificate to your child or sibling. You will have to give up your part. You can do this by selling your share to them. This will also depend on the company’s regulations. Some only allow transfers to happen between fellow shareholders. Others allow it to become transferred to an outsider.

Once the sale is complete, the shares become the property of the buyer. They become the new shareholder. Share certificates are personal property though. They can only become transferred once the previous owner endorses the certificate. There might be fees or taxes that you’ll need to pay.

Invest in Your Future

Secure your future with the help of Legacy Stock Transfer, Inc. Our company is a full-service stock transfer enterprise. We work with public and privately-held companies. We are now known for providing secure and personalized services. Our services include direct registration and multi-channel communications. We also issue share certificates. We can also help replace lost or destroyed stock certificates. You can call us at 972-612-4120. You can also reach out to us at info@legacystocktransfer.com.