With so much investing and trading happening through online channels, digital recordkeeping has largely replaced the traditional stock certificate. But if you’re old-school, you might still appreciate the way that a physical certificate provides proof of ownership in a company. This guide will show you how to get stock certificates and what you can do once you have them.
What Is a Stock Certificate?
A stock certificate is a proof of purchase showing that you own stock in a given company. Before all of our trading practices shifted to online platforms, investors would buy and share stock either in person or over the phone. With no digital record keeping system, companies would issue stockholders a stock certificate to serve as verification of their ownership.
Typically, a stock certificate would contain several pieces of information, including:
- The shareholder’s name
- Date of purchase
- Number of shares owned
- Type of stock owned
- CUSIP (a unique number that would identify the purchase)
- Signature of the authorized representative of the issuing company
If this seems quaint, it’s because it is. But without the internet or digital files, these paper documents were the only way to provide proof that you were the owner of your stock shares.
Why Do I Need Paper Stock Certificates?
This begs the obvious question, “Why would someone need paper stock certificates?” And actually, the short answer is simply: “They don’t.”
Our computerized systems are highly reliable and have completely eclipsed the record-keeping systems of the past. No one really needs paper certificates now that their information is stored on cloud-based servers.
With that being said, some investors might prefer the look and feel of a physical stock certificate. Maybe it’s for nostalgic purposes, the same way that business owners like to frame their first paycheck. In any case, you have to admit that there’s something unique about holding a certificate in your hands rather than simply storing your data in a digital cloud.
For still others, learning how to get paper stock certificates might represent a more reliable system than simply trusting in a digital database. Unlike an online server, stock certificates can’t be hacked, erased, or otherwise altered, which may provide a greater degree of certainty regarding your investments.
Can You Still Get Stock Certificates?
None of this discussion matters, of course, if you can’t even get stock certificates in the first place. These days, a large number of companies have completely ceased issuing stock certificates. For instance, Disney stopped issuing stock certificates in 2013, favoring digital ways of recording stock ownership.
The reason for this might be obvious. The convenience of digital records far surpasses that of paper documents. Additionally, there’s a cost associated with the printing and distribution of paper stock certificates, and many companies deliberately jack up their prices to deter requests.
Still, you may still be able to obtain a physical stock certificate from participating companies as long as you’re prepared to pay the fee.
How to Buy a Stock Certificate
Buying paper stock certificates is still possible if you know where to look. Here’s how to get a paper stock certificates for the companies that you’ve invested in.
How to Get a Stock Certificate Through Your Broker
The most direct way to buy paper stock certificates is through your broker. Even an online broker should be able to facilitate this process and deliver a physical certificate to the mailing address you provide.
Before you commit, don’t forget to ask about the cost. The issuing company will likely charge a fair amount for the process, and your broker may tack on his or her fees as well.
Don’t be surprised if it’s just not possible. Again, with so much of our financial world migrating to digital platforms, it will only become harder to obtain stock certificates.
How to Buy Stock Certificates Through the Issuing Company
Alternatively, you can choose to reach out to the company directly. If you provide them with your information, they should be able to verify that you are a shareholder and can issue you a stock certificate based on this information.
The same caveats apply, of course. And even if the issuing company is willing to provide you with this document, you might have to wait a bit before they are able to print it, sign it, and get it into your hands.
How to Get a Certificate Through a Transfer Agent
Some companies employ what’s known as a “transfer agent” to handle their stocks. You can usually find the contact information for this employee on your company’s annual report.
Existing shareholders can rely on a transfer agent to issue them stock certificates and show them how to handle the associated fees.
How to Get Physical Stock Certificates When Purchasing Stock
What if you don’t already hold stock in a particular company? You can reach out to the company beforehand (such as by contacting their transfer agent) and ask if they can issue you a stock certificate after you buy stock through their digital purchasing program.
This may not always be possible, of course, even if they can issue you a stock certificate. You may need to go through their digital purchasing program and then contact the transfer agent after the fact to have your digital record converted directly into the paper certificate.
What to Do with Old Stock Certificates
You’re clearing out an old desk in the attic when you come across something strange. It’s an old, musty piece of paper bearing the name of a company as well as your grandfather’s name. Once you realize that you’re holding a stock certificate, what can you do with it?
Return It to the Owner
Obviously, if the owner is still alive, they’re entitled to the certificate. After all, it would be illegal for a company to cash in a stock certificate that has someone else’s name on it. The rightful owner can then decide which of the next steps to take.
Cash in Old Stock Certificates
Assuming the issuing company is still in business, you may be able to cash it in. Your broker may be able to research this for you by using the unique CUSIP number listed on the certificate. If your luck holds out, you just might be able to transfer this stock certificate into your present-day portfolio.
Naturally, you noticed the words “may” and “luck.” You’re assuming that the company still exists and that the stock certificate hasn’t already been converted into digital shares. And if your name isn’t on the certificate itself, you may have to jump through some legal hoops to grant you permission to cash in on a relative’s stock.
Sell the Old Certificate
In some cases, the issuing company might have an interest in the certificate because of the nostalgia it evokes. If so, they may be willing to purchase the certificate from you at a cost you negotiate.
Otherwise, your local antique dealer might have interest in the certificate. Believe it or not, there’s a whole practice known as “scripophily,” which refers to the collecting of old stock certificates.
Use the Certificate to Decorate Your Office
If all else fails, you can always dabble in some scripophily of your own! Frame the certificate and hang it on your wall. An old stock certificate might be a good conversation piece, and it might look sharp in your home office or place of business.
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