Stock certificates are proof of ownership of shares in a corporation. They signify that the holder of stock certificates has an ownership or equity in a corporation and they convey certain rights and privileges to the person who holds them. One of those benefits is to be able to attend an annual general meeting or the corporation, to vote on shareholder propositions, to vote for the officers of the corporation and to ask questions of the management of the corporation about any of their actions regarding the company.
Ownership in a corporation is divided up into shares and each corporation will decide how many shares to issue and the price they will sell their shares in the marketplace. When person buys stock in a company they are used stock certificates in the value of their shares in the corporation. Only companies that are registered as corporations have the right to sell stocks and issue stock certificates as proof of ownership. Other forms of business registration such as sole proprietorships, partners or limited liability companies are not permitted by law to issue stock certificates or sell shares in the company.
There are many different forms of shares that are provided by corporations and all of them provide stock certificates as proof of ownership or equity in the corporation. They include common stock, preferred stock and many variations that allow different types of corporations to raise money and issue stock certificates. Common shares are usually issued from a corporation that is widely held and each share or stock certificate entitled the holder to one vote for the officers of the corporation at the annual general meeting.
Preferred stock is another form of share issue that corporations use to spread ownership around within the marketplace and in addition to some of the normal rights of a common shareholder, a person who holds stock certificates in preferred stock does not get the opportunity to vote their shares at an annual general meeting but they do get preferential treatment in a number of other ways. They may include receiving a fixed dividend for their investment dollars and getting this payment before any common shareholders and stock certificate owners get theirs.
To own stock in a successful company or to have share certificates in a corporation is doing well is a great feeling for any investor. They have the stock certificates, the proof of ownership in the hands or in their safe, and they relax in knowing that their investment is well protected. Having shares in a corporation and holding stock certificates is a great way to be involved in the wonderful world of investing and business. If your stock is not doing so well you may feel that your stock certificates are becoming worthless. But don’t despair, if your stock completely tanks then you will always have your stock certificates to paper the walls of your office, reminding you that investing is a gamble and that just having stock certificates is no guarantee of financial or business success.
David Gass is President of Business Credit Services, Inc., founder of http://www.SmallBusinessConsulting.com and co-developer of the Corporate Manager Software which manages the records of a Corporation or LLC. For a Free Trial of the software visit http://www.corporateforms.net
