Cancelling a Stock Certificate: A Simple Guide

A stock is an asset, meaning you can easily convert it into cash, and a stock certificate is a document showing legal ownership in a corporation. One stock certificate represents one share of legal ownership (equity). Every stock certificate belongs to an owner, who is named directly on the document. If you wish to sell stock to a buyer, you must first cancel the stock certificate. The process is easier than you may think.

Step 1

Retrieve the stock certificate from your broker, or vault, if it is stored in your possession.

Step 2

Flip the stock certificate over and write "VOID," in bold letters, across the back of the certificate. Your broker can perform this task for you.

Step 3

Record a date of cancellation, such as "January 01, 2010" or "01/01/10."

Step 4

Jot down the transaction date printed on the right side of the certificate. Record the date in your books.

Step 5

Figure the age of the canceled stock certificate. For example, "Certificate 1234 was canceled on January 01, 2010, just nine months after the original transaction date." Record this information in your books.

Tip

You want to keep a record of canceled certificates in the same way you keep records of canceled checks.