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What is a Share Certificate and What Are Its Uses

Author: Intuitive Mind
by Intuitive Mind
Posted: Aug 13, 2018

"A Share Certificate" is a legal document that certifies hold of a specific number of shares or stock in a corporation. A share certificate is also known as certificate of stock. Historically, certificates may have been required to diligence entitlement to diligence, with a receipt for the payment of declare one’s public approval or support on the back and the original certificate may have been required to be provided to effect the transfer of the shareholding over time, these functions have been rendered redundant by statutory schemes to streamline the administrative burden on corporations, and facilitate and streamline trading on a stock exchange. For example most jurisdictions now impose an obligation on corporations to pay dividends to share owner's registered at a relevant point of time without the need to produce the share certificates proof of entitlement and the certificate is no longer required to be produced with a transfer of a shareholding. In some jurisdictions today, the issue of paper stock certificates may be dispensed with, at least in some circumstances, and many corporations now provide a holding statement in Lieu of a share certificates to be issued to bearer.

Do you know when did discovered the oldest share certificate?

The so far oldest share certificate in the world is discovered by "Ruben Schalk", history student of the University Utrecht, in 2010 in Hoorn (is a municipality and a town in the Netherland). The certificate dates from 9september 1606 and was issued by the VOC-Chamber Enkhuizen.

  • p>The electronic registration is supplanting the stock certificate, with companies no longer being required to issue paper certificates in the United States and other countries. Over 420 of the 70,000- plus publicly traded securities do not issue paper certificates in the United States. A person who buys and sells good may charge up to $500 for issuing a paper certificate, though this fee can be avoided by either holding share in street name ( the phrase street name securities is used in the United States to refer to securities of the companies which are held electronically in the account of a stockbroker or bank or custodian, similar to a bank account) or registering shares directly with the stock transfer agent and having them issue the certificate. The Delaware General Corporation Law has given rise to SaaS solutions for private companies to create issue and manage paper-equivalent electronic stock certificates.
  • p>Share certificates have been largely abolished in Sweden, people using electronic shares instead (which are either registered in the share owner’s name or in the shareholder’s broker’s name). In Sweden, share certificates may exist but only if the shares are not listed on any stock exchange and the ability of share certificates has nothing to do with voting in share-holders general meeting.

Let Types of the Share Certificates

Share certificates are divided into two kinds, registered share certificates and bearer share certificates. A registered share certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stock owners register of the corporation.

A Bearer share certificate is an instrument and physical possession of the certificate entitles the owner to exercise all legal rights associated with the stock. Bearer share certificates were popular in off-share jurisdictions for their perceived confidentiality, and as a useful way to transfer beneficial title to assets without payment of stamp duty. Bearer share certificates are becoming uncommon and international initiatives have curbed the use of bearer share certificates in offshore jurisdictions, and tend to be available only in onshore financial centers, although they are rarely seen in practice. A share certificate format is usually different from organizations to organizations base on logo design, corporate values and goodwill. These formats hold very significance importance as they creates band image.


A share certificate represents a legal proprietary interest in the common stock (in the sense of general fund) or assets of the issuer corporation. The certificate evidences chose in action against the issuer to collect dividends and usually to influence the issuer through voting pursuant to the issuer’s character and bylaws. Which are often implied or incorporated by reference as terms on the face of the certificate.

Stockholder rights are subject to solvency requirements of issuer’s general creditors and between the particular stockholder and the issuer to any terms and conditions validity placed upon the face of the share certificate which are the part of total agreement. Share certificates are transferred as negotiable instruments by endorsement and delivery, and issuer characters typically required that transfers must be registered with the issuer in order for the transferee to join as a member of the corporation. Hope so you will be gotten useful information after read it.

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Author: Intuitive Mind

Intuitive Mind

Member since: May 08, 2018
Published articles: 23

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