SHARE CERTIFICATE

In corporate law, a share 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. For example, most jurisdictions now
impose an obligation on corporations to pay dividends to shareholders registered at a relevant point
of time without the need to produce the share certificate as proof of entitlement and the certificate is
no longer required to be produced with a transfer of a shareholding. In some jurisdictions today, the
issue of paper stock certificates may be dispensed with, at least in some circumstances, and many
corporations now provide a holding statement in lieu of a share certificate for each parcel of shares
owned.
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.

History
Ruben Schalk, history student at the Universiteit Utrecht, discovered (2010) the so far oldest share
certificate in the world in theWestfries 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.
In the United States and other countries, electronic registration is supplanting the stock certificate,
with companies no longer being required to issue paper certificates. In the United States over 420 of
the 7,000-plus publicly traded securities do not issue paper certificates. [1]
Brokers may charge up to $500 for issuing a paper certificate, though this fee can be avoided by
either holding share in street name(in the United States street name securities are securities held
electronically in the account of a stockbroker, similar to a bank account) or registering shares directly
with the stock transfer agent and having them issue the certificate.[2]
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 SaaS solutions[3] for private companies to create, issue and manage paper-equivalent electronic
stock certificates.

In Sweden, share certificates have been largely abolished, people using electronic shares instead
(which are either registered in the share owner's name or in the share owner's broker's name).
Share certificates may exist in Sweden, but only if the shares are not listed on any stock exchange in
Sweden, and the availability of share certificates has nothing to do with voting in shareholders'
general meetings.
Sometimes a shareholder with a stock certificate can give a proxy to another person to allow them to
vote the shares in question. Similarly, a shareholder without a share certificate may often give a
proxy to another person to allow them to vote the shares in question. Voting rights are defined by the
corporation's charter and corporate law.
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 physical possession of the
certificate entitles the holder to exercise all legal rights associated with the stock. Bearer stock
certificates are becoming uncommon: they were popular in offshore jurisdictions for their perceived
confidentiality, and as a useful way to transfer beneficial title to assets (held by the corporation)
without payment of stamp duty. International initiatives have curbed the use of bearer stock
certificates in offshore jurisdictions, and tend to be available only in onshore financial centres,
although they are rarely seen in practice.

Legal characterization of a stock certificate

A stock certificate represents a legal proprietary interest in the common stock (in the sense of the
general fund) or assets of the issuer corporation. The certificate evidences achose in action against
the issuer to collect dividends and usually to influence the issuer through voting pursuant to the
issuer's charter and bylaws, which are often implied or incorporated by reference as terms on the
face of the certificate.
Stockholder rights are subject to the solvency requirements of issuer's general creditors and to any
terms and conditions validly placed upon the face of the stock certificate which are part of the total
agreement between the particular stockholder and the issuer.
Stock certificates are transferred as negotiable or quasi-negotiable instruments by indorsement and
delivery, and issuer charters typically require that transfers must be registered with the issuer
(usually via the issuer's transfer agent) in order for the transferee to join as a member of the
corporation. Registration of transfer is a type of novation.[4]
There are old company research websites that can determine, for a fee, whether or not an old stock
certificate or bond certificate has collectible or redeemable value.

Share (finance)
In financial markets, a share is a unit of account for various investments. It often means the stock of
a corporation, but is also used for collective investments such as mutual funds, limited partnerships,
and real estate investment trusts.[1]
The term 'share' is defined by section 2(46) of the Companies Act 1956 as - "share means a share in
the share capital of a company includes stock except where a distinction between stock and share is
expressed or implied".
Corporations issue shares which are offered for sale to raise share capital. The owner of shares in
the corporation is a shareholder (or stockholder) of the corporation.[2] A share is an indivisible unit of
capital, expressing the ownership relationship between the company and the shareholder. The
denominated value of a share is its face value, and the total of the face value of issued shares
represent the capital of a company,[3] which may not reflect the market value of those shares.
The income received from the ownership of shares is a dividend. The process of purchasing and
selling shares often involves going through a stockbroker as a middle man.

Valuation
Shares are valued according to various principles in different markets, but a basic premise is that a
share is worth the price at which a transaction would be likely to occur were the shares to be sold.
The liquidity of markets is a major consideration as to whether a share is able to be sold at any given
time. An actual sale transaction of shares between buyer and seller is usually considered to provide
the best prima facie market indicator as to the "true value" of shares at that particular time.

Terminology

Shares outstanding are those that are authorized, issued, and held by third parties. The
number of shares outstanding times the share price gives the market capitalization of the
company, which if the trading price held constant would be sufficient to purchase the company.

Treasury shares are authorized, issued, and held by the company itself.

Issued shares is the sum of shares outstanding and treasury shares.

Shares authorized include both issued (by the board of directors or shareholders) and
unissued but authorized by the company's constitutional documents.

Tax treatment
Tax treatment of dividends varies between tax jurisdictions. For instance, in India, dividends
are tax free in the hands of the shareholder, but the company paying the dividend has to pay
dividend distribution tax at 12.5%. There is also the concept of a deemed dividend, which is not tax
free. Further, Indian tax laws include provisions to stop dividend stripping.

Share certificates
Historically, investors were given share certificates as evidence of their ownership of shares. In
modern times, certificates are not always given and ownership may be recorded electronically by a
system such as CREST(securities depositary).