In corporate law, a stock certificate is a legal document that certifies ownership of a specific number of shares of stock in a corporation. It means the document that represents an ownership stake in a corporation. It is a physical piece of paper that represents a shareholder’s ownership in a company. Historically, certificates may have been required to evidence entitlement to dividends, with a receipt for the payment being endorsed on the back; and the original certificate may have been required to be provided to effect the transfer of the shareholding. It includes information such as the number of shares owned, the date of purchase, an identification number, usually a corporate seal, and signatures. Each certificate has its own certificate number, issued by the company, which allows it to be tracked. It is a special piece of paper that represents your ownership of a piece of the company.
Stock Certificate represents a legal interest and ownership in a company’s common stock and its related stockholder rights. Over time, these functions have been rendered redundant by statutory schemes to streamline the administrative burden on corporations and to facilitate and streamline trading on a stock exchange. It contains all of the information needed to track it and your ownership of it. It contained information related to the number of shares, the date of issuance, an identification number, and other important information. It carries the name of the company whose stock is represented. Your certificate will also have your name on it, certifying that you are the owner of the stock. For example, most jurisdictions now impose an obligation on corporations to pay dividends to shareholders registered at a relevant point of time without the need to produce the share certificate as proof of entitlement, and the certificate is no longer required to be produced with a transfer of a shareholding. It is an instrument evidencing ownership of one or more shares of the stock of a corporation. Limited liability companies have a similar document called an ownership certificate. Finally, the certificate will be dated, indicating the day on which you became the owner of the shares.
Most jurisdictions now require corporations to maintain records of ownership or transfers of shareholdings and do not permit share certificates to be issued to bearer. The certificate would indicate the type of stock (common, preferred), any restrictions pertaining to the sale of the stock, the number of shares, the par value, etc.
