Delaware stock certificate
While the first stock issuance is generally an exciting time for a company, the task of choosing a type of stock certificate to offer investors is usually put on the back burner. Taking a few minutes to learn the fundamentals of stock certificates, on the other hand, might point you in the right direction and save your company a lot of trouble in the future.
A stock certificate is a document that proves ownership rights to a corporation’s shares of stock at the most basic level. When it comes to stock certificates, corporations have three basic options: (1) issue certificated shares with paper certificates; (2) issue certificated shares with electronic certificates; or (3) issue uncertificated shares without stock certificates.
When a company issues electronic certificated shares, it simply sends stockholders electronic certificates rather than paper certificates. A company should review its articles of incorporation and bylaws, as well as any other agreements with its stockholders, before issuing electronic certificated shares to ensure that it is not contractually obligated to provide paper stock certificates. Before being distributed to stockholders, a proposed form of the electronic certificate should be submitted to the corporation’s board of directors for approval.
Delaware is home to many Fortune 500 companies and is a popular location for new businesses to form. The Delaware Legislature recently presented the Governor with a House Bill that made a number of changes to the way Delaware corporations operate.
A corporation’s shares must be represented by certificates, unless the board of directors of the company decides, by resolution or resolutions, that some or all of its classes or series of stock will be uncertificated. Any such resolution would not apply to shares represented by a certificate until it is surrendered to the company.
Regardless of whether the board of directors adopts such a resolution, every holder of stock represented by certificates, and upon request, every holder of uncertificated shares, shall be entitled to have a certificate signed by, or in the name of, the chairperson or vice-chairperson of the board of directors, or the president or vice-president, and by the treasurer or an assitant, and by the treasurer or an assitant.
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Even if the stock or bond no longer trades under the name printed on the certificate, it may still be valuable. It’s possible that the company merged with another or merely changed its name. Keep in mind that the current share price may not be helpful in determining the certificate’s value, if any, due to corporate reorganizations (such as splits, mergers, or reverse mergers). If the name of the transfer agent is printed on the certificate, the best way to learn more about it is to contact the transfer agent. If the transfer agent listed on the certificate is no longer active, contacting the state agency in charge of incorporations in the state where the company was formed may be helpful. If you have a brokerage account, you may want to ask your broker if they can help you research the certificate.
Other sources of information include the Internet, public libraries, stock exchanges, and stockbrokers’ offices. Even if you discover that a certificate has no investment value, you may discover that it is valuable as a collectible.
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The physical written certificate indicating the issuance of shares of stock in the company is known as a stock certificate. The Articles of Incorporation authorize a certain number of shares of stock when a company is created. The company then issues some or all of those shares of stock to its shareholders in order to raise funds. A Certificate of Stock may be used to officially document the shares issued to individual shareholders. We provide a free corporate stock certificate template.
This free corporate stock certificate template can be used to document a shareholder’s stock ownership in your company. This certificate template, like all of our forms, is for personal use only.
We also have a variety of additional tools and resources at Northwest to assist you in maintaining your business. For $125 per year, we provide registered agent services in every state. We charge $100 plus state filing fees if you need assistance creating a company in your state or any other state.