Share Certificate Template

A share certificate template is a written document that is issued to shareholders of a company to affirm their share in the business. This certificate is signed on behalf of the company, so it bears legal importance too. A share certificate is a financial instrument that entitles any individual or group of persons to claim dividend declared by the issuing company. It is also an investment certificate that provides a higher rate of profit at the end of a fiscal year as declared by the company. At the time of maturity, the cardholder can exercise different options. For instance, he/she can withdraw his/her amount or may convert his/her investment into ordinary shares. The key information contained in this certificate is the name and address of the shareholder, the number of shares, company information, face value of the share, par value of share and date of transfer of ownership. It is also known as a stock certificate in different financial markets and in different countries. It is drafted as a simple certificate but the company logo and signature of the authorized person must be placed with company information.

Benefits of Share Certificate:

The share certificate format offers you various benefits which you can avail anytime before maturity. However, these benefits vary due to the nature of this instrument. A share certificate confirms the ownership of a certain number of ordinary shares with the par value or original value. In order to sell these shares, the owner needs to bring this certificate to confirm his/her ownership. Similarly, to calculate the amount of premium which an owner can earn by selling an ordinary share is based on the value mentioned on this certificate. If the amount is in excess of the par value, that means it is a premium amount. However, if the sale value of an ordinary share is less than the par value of an ordinary share, then it is a discounted price. Going further, the certificate holder can also pledge this document to those financial institutions who are accepting it. This way, the owner of this certificate can get financial benefits without selling it.

Importance of Share Certificate:

The share certificate is a monetary instrument that holds a special significance in financial markets. It secures a certain amount of investment in a specific company’s shares. The certificate holder can physically verify his/her ownership and can cash it at the current market rates. Being the stakeholder of a specific company, this certificate enables you to take interest in the financial matters of the company. The owner can keep an eye on the profitability of the company and the market value of its shares. However, a company complies with the statutory requirements as governed by state laws. Therefore, they need to keep tracking their shareholders to make sure their financial matters are transparent. Due to the modern science and information technology improvements, E-certificates are also playing a significant role. Now, an owner can verify his or her ownership through online platforms as provided by the government. Presently, share certificates are used in business transactions and flourishing the use of financial instruments in financial markets.