Shareholder Certificate 101: How do they work?

KEY TAKEAWAYS

• Shareholder certificates are essential documents that prove ownership in a corporation.
• Understanding when and how to use these certificates can prevent confusion and missed opportunities.
• They play a crucial role in business deals, helping investors make informed decisions confidently.
• You can use NotaryLive or ComputerShare to optimize the process.

If you're an investor, business owner, or part of a corporation wanting to understand shareholder certificates, this article is for you.

Learn when these certificates are needed, how they show ownership, and assist in business deals, helping you make smart investment choices with confidence.

1.What Is A Shareholder Certificate?

A shareholder certificate, also known as a stock certificate or certificate of shares, is a document that provides legal proof of ownership.

It shows that you have invested in the company and hold an equity stake in it.

This certificate, combined with proper authentication, can also be used to transfer shares if needed.

What's included in the shareholder certificate?

The shareholder certificate includes information such as:

• holder's name
• number of shares owned (investment record)
• the date of issuance
• company name
• certificate number
• authorized signatures

2. Issuing a Shareholder Certificate

Physical vs. Electronic Shareholder Certificates

Choosing between physical and electronic shareholder certificates involves weighing each option's benefits.

• Physical Certificates: Provide a real sense of security and have traditionally shown ownership, safely kept by shareholders.
• Electronic Certificates: Fit the digital age by offering convenience, easy access, and smooth transfer, saving time and resources.

Physical certificates give a reassuring record, while electronic ones make record-keeping and transactions easier.

The choice depends on shareholder preferences and the goals of the corporation.

Consider the benefits of both options.

3. Shareholder Certificates in Different Scenarios

Stock certificates are important documentation used in many ways in the business world.

They are needed for different activities involving shareholders.

• Transferring Ownership: These certificates are needed when shares are passed on, like in inheritance.
• Mergers and Acquisitions: They confirm who the shareholders are and prove the parties are legitimate.
• Reorganizations or Spin-offs: Shareholder certificates make sure shares are given out correctly, keeping things clear during changes.
• Notarization: Sometimes certificates need to be notarized with legal papers like stock transfer forms to make sure transactions are real and trustworthy.

4. When Notarization is Required

Shareholder certificates usually don't need notarization unless the corporation is doing something important like transferring ownership.

In these cases, other documents like:

• stock transfer forms
• power of attorney, or
• affidavits of domicile

. . . might need a notary's seal to make sure everything is correct.

What is a stock transfer form?

Stock transfer forms are crucial for transferring share ownership and often require a notary to verify identities, ensuring signatories are genuine.

What is a power of attorney document?

A power of attorney document lets someone else make decisions for you, and notarization ensures it's valid and reduces disputes.

What is a affidavit of domicile?

Affidavits of domicile prove where someone legally lives and are often needed for estate matters after a person passes away.

5. Using NotaryLive for Notarization

NotaryLive makes notarizing documents like shareholder certificates easy and secure online, so you don't have to travel, ensuring everything is legally recognized and compliant.

NotaryLive simplifies the process: 

• No Geographical Constraints
• Time Efficient
• 24/7/365 Availability
• Enhanced Security 

NotaryLive works in 4 simple steps:

To get started, you can click the button below.

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FAQs for Shareholder Certificate

• Who makes a share certificate?
  • A share certificate is typically issued by the corporation's board of directors or an authorized officer of the company.
• How do I get my share certificate?
  • To get your share certificate, contact the company's transfer agent or the corporate secretary, who can provide the necessary steps to issue the certificate for your shares.
• Do I need a lawyer to fill out an affidavit of domicile?
  • It’s not mandatory, however, consulting with a layer can help ensure that the affidavit is correctly filled out and legally sound.
• Is there a platform for shareholders?
  • For stock transfers, entities like ComputerShare are a good resource.

Does NotaryLive sound like the right fit for you and your business? 

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