A stock certificate is a legal document that proves the ownership of shares. It represents how many shares of the company you own. You can also say it is a share certificate for your ease. This certificate allows you to record the number of shares, identification number, and other information related to the shares of the company. Further, a stock certificate works as evidence of ownership for a certain number of shares. Without it, a person can not prove that he/she owns a specific share of a company. However, it serves as a record of the shares and allows the owners to sell the shares at the time of need.
Types of Stock Certificates:
There are two types of stock certificates which are listed below:
Registered Stock Certificate:
This type of stock certificate serves as proof of title and record for the holders of the actual shares. This stock certificate is registered in the record of the organization to keep both ends secure.
Bearer Stock Certificates:
This type of stock certificate serves as proof of the ownership of shares. It provides all the legal rights to the owner of the shares. Nowadays this type is very rare. In short, they were used in the old times for the shares that were bought offshore. People used them to transfer the title to different assets owned by the organization without paying any stamp duty in the past.
When designing a Stock Shares Certificate for your company, there are a few things to keep in mind. Further, a Stock Shares Certificate is an important document to both you and your shareholder. Certificates that look professional should be the only thing you use.
Why do Organizations Sell their Shares?
Organizations sell their shares to gather an amount that the organization can use after a specific period. The selling of shares is a secure way to gather money because it allows the company to get the sold shares back for the owners of the shares by giving some profit to them. In this way, the company gathers some money and uses it for their benefit, and gets their shares back by giving a little profit to the shareowners.
Here are some common reasons for selling the shares:
- To create a new factory.
- For launching a new product in the market.
- To decrease the amount of debt.
- To pay for buying a new building.
- For buying new heavy machinery.
- For providing flexibility to all the owners of the organization.
- To stable the financial condition of the organization.
Generally, an investment bank manages the stock and serves as a link between the organization and the investors. When a company decides to sell the shares then it has to go through many federal and state regulations. A shareholder can enjoy the benefits associated with the shares and can sell the shares when the rate of the share increases.
We have listed some high-quality stock certificate templates in this post. They all are free and you can easily download them by just clicking on the download button.
Tips for Creating a Stock Certificate:
The first thing to keep in mind is the design. As this is an item that represents stock in your company, this is an extremely valuable piece of paper. It is therefore important to keep it from being faked. Choosing an elaborate design for the background will help keep your certificates from being faked by those who would use them for fraudulent purposes. Specific varieties of color and designs that are hard to mimic are one option. Using a symbol that is often used to represent your company could also be used when designing your Stock Shares Certificate. However, this will reduce the chances of fraud.
Layout Design:
Another thing to keep in mind is the layout. Very important information will be contained on these Stock Shares Certificates. You should have all the information that needs to be on these certificates marked. The most important things to include are the name of the person receiving the shares, the name of your company either listed at the top or as part of the design, how many shares, the date that these shares were awarded to them, and the signatures of the executives of the company.
Add some Space for Signatures:
The signatures of the executives may be printed on or they may be signed in ink by the executives themselves. Given how many certificates will be printed and awarded to various individuals, it’s advisable to create a stamp that has the executives’ signatures or insert them into the set printable form that you will print onto your certificates.
Use a Complex Background:
When having to prepare many Stock Shares Certificates, it can be frustrating when the type overlaps with the pre-printed lines on the certificate. When this happens, the certificates will have to be redone. The best idea is to create a certificate with a complex background that can be printed on. Then make a printable form that can be filled in on the computer so that when it is printed on the certificate, the spacing and placement of the words and lines will come out correctly every time. This will keep you from wasting money and time.
Use High-Quality Paper:
All of these should be printed on high-quality paper to maintain a professional look. These will be kept by the shareholders for a long time and will possibly even be passed down. Therefore it is best to make sure they will stand the test of time and be printed on the best materials and with the best inks. Always remember that your Stock Shares Certificates are yet another way to represent your business and should be treated as such.
One last thing to keep in mind when designing your Stock Shares Certificate is how these will be printed and filled out. While designing one that is already printed with all the lines provided may seem like a good idea, this can cause a great amount of frustration when it comes time to fill them out. Printers, stock cutters, and computer programs all work slightly differently.
