A stock certificate is a document representing a share of ownership in a company.
- Providing a shareholder with a proof of purchase for a stock
- Commemorating or recording a meaningful investment.
Corporations issue stocks for sale on public exchanges every day. Stocks represent shares of ownership in the company, or “equity,” and they are a foundational part of nearly everyone’s investment portfolio. Buying and selling stocks is a pretty mundane experience, but when you purchase a share of stock from an exchange, how do you know what you’re actually buying?
Like most everything in modern times, stock exchanges operate electronically. As a result, all records regarding the issuance and exchange of stocks are kept in electronic records. In other words, if you buy a share of stock, you actually own an electronic piece of data that represents a small share of ownership in a public company. However, stock exchanges have operated well before modern communication technology digitized everything, and shares of stock were once issued in hardcopy. Now, investors can still request paper stock certificates if they want a physical document that represents their ownership interest in a company.
Stock certificates were the only documentation of a sale of shares before electronic records were available. Some investors may want a hardcopy stock certificate for their personal records, but stock certificates are now more of a novelty commemorating a memorable investment. Consider issuing stock certificates to your initial investors as a token of gratitude, or print them up for you and your co-founders as a symbol of your legitimacy and hard work. Using this template, you can make a beautifully-crafted stock certificate that you can give to anyone who has invested in your company.