Stock Certificate
A physical paper document issued by a company or its transfer agent as evidence of a shareholder's ownership of a specified number of shares.
Full Definition
A stock certificate is a legally valid paper instrument that represents ownership of shares in a corporation, bearing the shareholder's name, the number of shares, the CUSIP, the issuer's name, and authentication features such as a corporate seal and authorised signatures. While largely superseded by electronic registration through DRS, physical certificates remain legally valid and must sometimes be surrendered and cancelled during corporate actions such as mergers, name changes, or reverse stock splits. Editors working on corporate action letters must understand the difference between certificated shares and book-entry shares, and must instruct shareholders accurately regarding certificate surrender procedures.
Usage
Usage note: Distinguish between 'certificated shares' (held via physical certificates) and 'book-entry shares' (held electronically). Do not use 'stock certificates' as a synonym for DRS statements.
In Context
- "Shareholders holding physical stock certificates must submit them to the exchange agent by the deadline." — Merger letter of transmittal
- "The company no longer issues stock certificates; all new shares are registered through DRS." — Transfer agent FAQ