Filling a Stock Certificate

By David Gass

A stock certificate is a document that is the physical proof of your ownership of shares in a company. Usually, a nominal fee is charged for issuing the paper certificate and it has to be held securely, because it is the proof of ownership and if it is lost the broker or the company may charge extra. Stock certificates enables shareholders to get direct contact with the company. Shareholers can use stock certificates as collateral inorder to obtain a loan. However, if a shareholder moves to another place he/she should inform the company about the change of address and if he/she has to sell the stock, he would have to send the certificates to his agents or the comapny’s transfer agent. This process is lengthy and time consuming. The certificate number is very important and has to be noted carefully, incase you need it to prove your ownership or if you lose your certificate. Incase the certificate is lost, shareholders have to report it to the broker who will inform the SEC (Stock Exchange Commission) and issue a stop transfer order to prevent some one from transfering the ownership.

Street Name Registration
These days shares are hardly held in the form of stock certificates.

In street name registration, shares are issued by a brokerage firm and held by them, the shareholders will be recorded by the brokerage firm as the owners of shares. The brokerage firm sends annual report and proxies, credit the dividend and interests and provide tax consolidation information to shareholders.

Direct Registration
In direct resistration the shareholders’ name will be directly registered with the company. Although certificates are not issued, statement of ownership, periodic statement of accounts and other information will be mailed directly by the company to shareholders.

Ways of Registering a Stock Certificate
There are different ways to register a stock certificate.

Individual Registration: Ownership is given to a single individual or shareholder and the person’s legal name has to be used.

Joint Registration: There are two kinds of options in joint registration. Joint tenant with rights of survivourships is used when two people have equal claim to the assets, and if one of them dies shares are transfered to the other person immediately. In Tenants in common option, shares are registered under two individuals names, who are equal owners and in case one of them dies, the person’s shares are transfered to his/her estate.

Custodial Registration: There are several kinds of custodial registration. The name of the custodian and the beneficial owner, who happens to be a minor is necessary, in order to pursue custodial registration.

Trust Registration: The trust registration process requires the name of the trust, the beneficiary and the date of the trust instrument.

Transfer On Death (Tod) Registration: This is a way of registering shares and designating beneficiaries, which allows the beneficiaries not to go through the probate process in case the shareholder dies. This registration process also allows shareholders to keep control over their securities till they are alive.

Street Name Registration and Direct Regisrtation have become more convenient to shareholders due to advancement in technology. The brokerage firm firm maintains records and sends monthly paper statements to shareholders. Several sites offer online forms and softwares at reasonable prices, which would enable you fill your stock certificate without much hassles.

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