A stock certificate is issued by corporations to certify the total number of shares. It is a legal document that reflects that the person or the corporation holding them owns a particular number of shares of the respective company. These stock certificates give a right to the owners to attend the general meetings of the company and also allow him to cast a vote in these meetings.
There are many kinds of stock certificates that are available in the market these days. Registered stock certificates contain the name of the owner, the number of shares he holds in that particular company, the stock certificate number, its issuing date, CUSIP number and transfer agent. Bearer stock certificates were used earlier but now their usage is avoided by the companies as they are irreplaceable if stolen and contains no name of the owner. There are a few other kinds of certificates available as well like Book Entry stock certificates, Street Name stock certificates, Direct Registration system and Obtaining a Physical Certificate. Out of these, the registered stock certificates are the most commonly used ones by companies. (more…)