Legal Definitions - share certificate

A share certificate is a formal, physical document issued by a company that serves as tangible proof of an individual's or entity's ownership of a specific number of shares in that company. It details the company's name, the shareholder's name, the number and type of shares owned, and often bears the company's seal and signatures of authorized officers. While many modern shareholdings are recorded electronically, a share certificate represents the traditional, legal evidence of equity ownership.

• Example 1: Investing in a Private Company
  When Ms. Elena Rodriguez invested $50,000 in "GreenTech Innovations LLC," a privately held startup, the company issued her a beautifully designed document. This document, a share certificate, stated that she now owned 10,000 Series A Preferred Shares in GreenTech Innovations LLC, signed by the CEO and corporate secretary. This certificate is Ms. Rodriguez's official, physical record confirming her stake in the company.

• Example 2: Transfer of Ownership Through Inheritance
  Upon the passing of Mr. John Miller, his will stipulated that his 2,500 shares in "Heritage Publishing Co." should be transferred to his niece, Laura. After the legal probate process was completed, Heritage Publishing Co. cancelled Mr. Miller's original share certificate and issued a new share certificate directly to Laura. This new certificate formally established Laura as the legal owner of those 2,500 shares, reflecting the change in ownership.

• Example 3: Historical Shareholding in a Public Company
  In the 1970s, before widespread electronic record-keeping, Mr. Thomas Lee purchased 500 shares of "Midwest Rail Corporation" through his broker. A few weeks later, he received a physical share certificate in the mail from Midwest Rail Corporation, which he carefully stored in his home safe. This certificate was the sole proof of his ownership of those shares, and he would have needed to present it to sell or transfer them.