A company stock certificate is a legal document that discloses ownership of a stated number of shares in a corporation's stock. It provides the investor/shareholder an equitable interest in the company in which he invested. Any company seeking to raise capital from outside investors must provide a stock certificate to all its shareholders.
In a private placement offering, the information contained in the stock certificate will be located in the offering documents. Every investor should get one.
To start, download preprinted stock certificates from a business stationery supply company. Basic standard stock certificates provide space to add your company name, shareholders and other important information. Use your word processing software to complete this process.
Type the name of your company on the top of the stock certificate along with the state in which your company is incorporated.
Assign a unique number to each certificate issued to your shareholders. This enables you to keep track of all your company's certificates if a shareholder wishes to sell his shares.
Type the name of the shareholder in the designated space provided on the preprinted stock certificate.
Type the number of shares issued to your shareholder and the par value. Par value refers to the amount at which a stock can be redeemed.
Sign the stock certificate. The corporate secretary and the president of the company sign the stock certificate that is to be issued to the shareholders / accredited investors. Stamp the certificate with the company's corporate seal to validate it.
Add a disclaimer, which is called the stock legend, in the back of the stock certificate stating that the shares are restricted. The U.S. Securities and Exchange Commission has certain restrictions regarding issuing and owning private placementstock. Rule 144 allows the resale of a restricted stock if certain conditions are met. It also describes how a restrictive legend can be removed. In order for the disclaimer to be removed you will have to retain the services of a transfer agent. He will verify the shareholder and provide an attorney letter stating that the disclaimer will be removed upon the surrender of the original stock certificates.