A stock certificate proves a shareholder’s ownership in a company. Learn how to get stock certificates and why you need them in this quick guide.
If you're looking for long-term investments, one of the most common go-tos is stocks. Not only do they help build your savings, but they can also protect your money and maximize your returns. Being a stockholder in a company entails different benefits and risks.
There's one thing you can be certain of, though - you're still likely to have (and need) a stock certificate. Want to know how to get stock certificates? This all depends on the company and broker you go with.
These days, stock certificates can be both physical and digital. However, physical ones have a distinct advantage. They're more than mere proof of ownership.
In many cases, you won't be able to sell or trade without them. Besides, who wouldn't want a tangible receipt of your hard-earned investments? Find out more about how to get stock certificates and why you should look into getting them today by reading below.
Why Get Printed Stock Certificates?
The reasons for getting stocks are quite straightforward. For individual investors, they help you grow your overall wealth. They're a good way of staying ahead of inflation while diversifying your assets.
For companies, stocks offer a way to raise massive amounts of capital by giving investors a stake. The question is, why would you want a printed one in today's digital age? To answer that, you need to know what a stock certificate is.
What Is a Stock Certificate?
A stock certificate is a legal document that proves you own stock in a company. It has to abide by certain legal rules and regulations. A stock certificate also serves as a physical guarantee of someone's ownership and right to sell or trade.
This is assuming there aren't specific restrictions that affect how you trade, sell, or gift a specific stock. As long as you purchase or obtain the stocks legally, you're entitled to any dividends they accrue. In a lot of cases, you don't need to be able to produce the certificate to get the benefits.
A stock certificate is like a receipt, but the issuer also knows who the legal owner is. This is also why stock certificates have a stock certificate number on them, to make them easier to register and track. As long as the stock registration is under your name, you're good.
The problem is you need to produce the stock if you plan to sell or trade ownership of it. You'll need to physically sign it over to the new owners, whether it's back to the company or a third party. Because of this, physical stock certificates are indispensable to the process.
If your stock certificates get lost or stolen, you should try and get them back.
How Do You Start the Process?
Now that you know the answer to what is a stock certificate, the next step is to know how to get stock certificates. This will involve understanding the process behind being able to offer stocks. You also need to know how to start and what kind of red tape is necessary.
The thing is, not everyone can sell or offer stocks. A company needs to put in all the necessary paperwork to incorporate. They won't be able to hit the public market with their shares unless they do that.
They need to dot their i's and cross their t's before they can offer paper stock certificates. Before they make their announcement of going public or incorporating, there's another step. Companies need to decide how many shares they are willing to create.
They also need to choose what percentage to offer to the public. The public market will decide at what prices the stocks trade for. This price will also get affected by the perceived value of the company to potential shareholders.
The supply of available shares will also intersect with demand to set a balanced value. Once you've decided how many shares you wish to offer and have gotten the rest of the red tape out of the way, you can move on. You need to issue the stocks, which will usually involve a stock issuing company.
They'll help streamline the process of making a printable stock certificate.
You Need an Issuing Company
Issuing stocks is difficult and time-consuming. You have to match a series of expectations and regulations. Many companies aren't equipped to handle this and spend huge amounts of time and money on the process.
Your stocks need to be uniform and identical, with documented serial numbers. They also need to adhere to a standard template form for US stocks.
It's also super easy to use digital tools to photoshop almost anything. This can create problems for instilling trust and proving legitimacy. Digital stock certificates are also open to attack and abuse by cybercriminals.
You need to find a reputable company that provides blank printed stock certificates. This will let you customize things to your needs and your company's details. Don't waste time designing a certificate that conforms to standard forms.
You can skip right to mass printing by finding a blank or template from a company. These kinds of companies also handle and fill in the legal details for you, saving you a headache. A key benefit is also making sure your physical certificates are identical.
Even the smallest imperfection can lead to huge issues. This is especially true if several thousand get printed before anyone notices. Making sure everything lines up by hand is excruciating and troublesome.
Why and How to Get Stock Certificates
Stock certificates have been the tried and tested method for proving stock ownership for a long time now. Everyone trusts them since they're registered and follow strict legal and governmental regulations. However, there are also tangibility, privacy, and safety factors that digital certificates can't match.
After laying out all the groundwork, you need to know how to get stock certificates. Make the process easier by signing up with trusted companies. At Exhibit Indexes, we have several legal templates, including stock certificates, so contact us today.