Stock Certificate .

December 29, 2020 By Swapnil Suryawanshi

In corporate law, a stock certificate (also known as certificate of stock or share certificate) is a legal document that certifies ownership of a specific number of shares or stock in a corporation. 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. 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.

6 Things You Might Not Know About Stock Certificates

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.

Another alternative to both paper and electronic registration is the use of paper-equivalent electronic stock certificates. Forty-seven states have enacted legislation equivalent to the Uniform Electronic Transactions Act, which formalizes equivalency for electronic signatures “in writing” requirements. This, together with the enactment of legislation permitting the use of “facsimile” signatures on certificates (such as in §158 of the Delaware General Corporation Law), has given rise to software as a service technology[6] for private companies to create, issue and manage paper-equivalent electronic stock certificates.

History :

Ruben Schalk, history student at the Universiteit Utrecht, discovered (2010) the so far oldest share certificate in the world in the Westfries Archief in Hoorn. The certificate dates from 9 September 1606 and was issued by the VOC-chamber Enkhuizen. It was sold to Pieter Hermanszoon Boode. The second page records the payments of dividend.