Reviewed by Aug 27, 2020| Updated on
Share certificates are written documents that are attested on behalf of a firm or a corporation, which acts as legal proof for ownership stating the number of shares shown. Another name of the share certificate is 'stock certificate'.
When a firm issues stocks in the market, the investors who purchase the same are given share or stock certificates. Share certificates fundamentally act as the receipt of purchase and indicate the ownership of stocks in a particular company. Share certificate confirms ownership that is registered and shows the date from which it is registered.
Details Provided in Share Certificate
Share certificates issued in India contain the following details:
- Name of the issuing firm
- Corporate Identification Number (CIN)
- Full registered address of the company
- Full legal name of the shareholder
- Member's folio number
- Number of shares purchased by the investor
- Amount of money spent by the investor to purchase the shares
- Distinct number of shares
Breaking Down Share Certificate
Shareholders with stock certificates can authorise another individual to vote the shares at stake. Likewise, shareholders with no certificates can also give representatives to another individual to authorise them so they can vote for the shares at stake. Note that voting rights are as per the definition of the company's charter and corporate laws.
Replacement share certificates are issued when an investor's original share certificate is damaged, stolen, or lost. The new or replacement share certificate will represent the same number of shares that were mentioned in the original share certificate. The firm will take damaged certificates on issuing the replacement share certificate. Shareholders can ask for separate certificates if they wish to. If not, they will be issued a single certificate.
Traditionally, share certificates were asked to claim the entitlement of receiving dividends. Firms on paying dividends to the shareholders were stamping the back of the share certificate with receipt of payment.