Business, Legal & Accounting Glossary
In company law, a stock certificate – called a certificate of stock by some or also sometimes referred to as a share certificate – is a lawful certificate that verifies tenure of a detailed quantity of shares of stock in a company. In big businesses, purchasing stocks will not always give a stock certificate.
In America, electronic registration of shares is ousting the stock certificate. Firms are no longer obligatory to give paper records, and nearly 420 of the seven thousand publicly traded securities do not. Agents could charge up to five hundred dollars for supplying a paper certificate, however, this payment can be circumvented by recording stocks right with the stock transfer agent and asking them the issue of certificate.
Let’s take the example of Sweden, where the share certificates have been majorly done away with, individuals use electronic shares as an alternative. These are registered in the stock owner’s name or in the stock owner’s broker’s name. In Sweden, share certificates may be owned by few, but only those shares that are not listed on any stock exchange in Sweden. Share certificates have no relationship with voting rights. An owner of Share certificates can give proxy to another person to vote on his behalf.
There are two types of Stock Certificates one is called the registered stock certificate and the other is called the bearer stock certificates. Bearer Stock certificates as the name suggest belongs to the person who holds those certificates. The Bearer Stock certificates physical possession of the certificate entitles the holder to exercise all legal rights. There are various laws that now help to remove the bearer stock certificate and they are no more seen nowadays.
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This glossary post was last updated: 16th April, 2020 | 3 Views.