Understanding Stock Certificates: What You Need to Know

A stock certificate designates who owns how many shares of the company in question. It is a legal document that can be issued by a public or private corporation. With today's technological abilities, most public stocks are sold with a "street registration," meaning there is no certificate issued with records maintained at the company and brokerage firm. Most private companies still issue stock certificates to record ownership interests. Filling the certificate out correctly is essential to preventing problems when liquidating.

Step 1

Obtain a blank corporate stock certificate. Find this in your Articles of Incorporation Book or through computer templates.

Step 2

Fill out the front of the stock certificate with the company name and address. If the certificate was obtained from your incorporation book, this should already be printed.

Step 3

Fill in the name and address of the person purchasing the stock with the number of shares they are buying.

Step 4

Have two corporate officers sign the stock certificate.

Step 5

Emboss the certificate in the indicated area for the corporate seal. The corporate seal should be with your incorporation book. It is a type of stamp created specifically for your corporation.

Step 6

Log the stock certificate number located in the upper right corner into the corporate ledger. Include the name and number of shares purchased and the price. This officially tracks stock purchases in private companies.

Tip

The back of the stock certificate can be filled out for name changes and other transfers of the stock already issued.

Warning

Consult a broker or attorney if you have any questions about selling or transferring private stock shares.

Things You'll Need

• Computer

• Internet connection

• Incorporation book

• Corporate seal