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In ], a '''stock certificate''' (also known as ''certificate of stock'', or, in some countries, a '''share certificate''') is a legal document that certifies legal ] of a specific number of ]s in a ]. Note that in large corporation, buying shares does not always lead to a stock certificate (in a case of a small number of shares purchased by a ], for instance). | ||
| Usually (but not always, and the legislation depends on the country as well on clauses defined by the corporation itself), only ]s with stock certificates can vote in a shareholders' general meeting. Sometimes, though, a shareholder with a stock certificate can give a proxy to another person to allow them to vote the shares in question. | Usually (but not always, and the legislation depends on the country as well on clauses defined by the charter of the corporation itself), only ]s with stock certificates can vote in a shareholders' general meeting. Sometimes, though, a shareholder with a stock certificate can give a proxy to another person to allow them to vote the shares in question. | ||
| Stock certificates are generally divided into two forms: registered stock certificates and bearer stock certificates. A registered stock certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stockholder's register of the corporation. A bearer stock certificate, as its name implies is a ] and possession of the certificate entitles the holder to exercise all legal rights associated with the stock. Bearer stock certificates are becoming increasingly less common: they used to be popular in ] where they were perceived as a means to further preserve confidentiality, and a useful way to transfer beneficial title to assets (held by the corporation) without payment of ]. However international initiatives have curbed the use of bearer stock certificates in offshore jurisdictions, and curiously, they tend now only to be available in onshore financial centres, although they are rarely seen in practice. | |||
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Revision as of 11:46, 4 August 2006
In corporate law, a stock certificate (also known as certificate of stock, or, in some countries, a share certificate) is a legal document that certifies legal ownership of a specific number of stock shares in a corporation. Note that in large corporation, buying shares does not always lead to a stock certificate (in a case of a small number of shares purchased by a private individual, for instance).
Usually (but not always, and the legislation depends on the country as well on clauses defined by the charter of the corporation itself), only shareholders with stock certificates can vote in a shareholders' general meeting. Sometimes, though, a shareholder with a stock certificate can give a proxy to another person to allow them to vote the shares in question.
Stock certificates are generally divided into two forms: registered stock certificates and bearer stock certificates. A registered stock certificate is normally only evidence of title, and a record of the true holders of the shares will appear in the stockholder's register of the corporation. A bearer stock certificate, as its name implies is a bearer instrument and possession of the certificate entitles the holder to exercise all legal rights associated with the stock. Bearer stock certificates are becoming increasingly less common: they used to be popular in offshore jurisdictions where they were perceived as a means to further preserve confidentiality, and a useful way to transfer beneficial title to assets (held by the corporation) without payment of stamp duty. However international initiatives have curbed the use of bearer stock certificates in offshore jurisdictions, and curiously, they tend now only to be available in onshore financial centres, although they are rarely seen in practice.
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