Connell Mccarty posted an update 8 months, 4 weeks ago
A Digital Stock Certificate is a record of the ownership of stocks, as issued by the company. The name “Certificates” comes from the records that company filed in the Securities and Exchange Commission. These records list the stocks that have been issued on an agreed date for distribution. They also show the total number of shares outstanding at that time. The certificates are a record of the shareholders entitled to dividends.
Digital stock certificates were first introduced to the public in 1970. Before that time, the only record was the microfilm in a securities office. When a shareholder wanted to check the total number of shares owned, he or she had to go to the securities office. It took days to obtain this record. Furthermore, each record contained only the name of the holder and the stock’s symbol. It was impossible to verify the ownership without specialized help.
This new system changed the way that accounting was conducted. Instead of startup , shareholders could now access a central record that contained all of the information about a particular company. The new certificate contained the owner’s name and the date of issue along with the total number of shares. This information could then be used by shareholders to make dividend and capital gains determinations for their personal accounts. Once the shareholder verified the validity of the record, the shareholder could then sell the shares.
The certificate allows for easier accounting procedures and faster transactions for both buyers and sellers. For example, if a shareholder wanted to sell his or her shares, all that he would need to do is visit the investor’s website and enter the number of shares being sold. The website will then give him or her the option of purchasing or selling new shares. The investor could then enter in the amount of money needed to issue new shares and then have those issued quickly.
With this electronic system, it is no longer necessary to go down to your local brokerage and stand in line with several hundred other people to purchase or sell shares. The internet provided the means for investors to invest their money anywhere they wanted. However, buying and selling corporate stock certificates had always required a formal order. Investors would wait for a broker to issue them a certificate, sign it, and then make the sale. Now, this has all been eliminated. By using the internet, an investor can now simply log online, enter the number of shares that he or she wants to purchase, and have them be issued immediately.
There is also no longer a need to worry about losing ownership of a particular stock certificate. Before, if a shareholder wanted to sell his or her shares, he or she would have to send a request through the mail or phone to the company’s headquarters. Then, after a period of time, the company would either issue the requested certificate or allow the sale. However, many companies did not allow direct sales of stock certificates. As a result, many investors were left owning shares of companies that they had no interest in whatsoever.
Digital certificates allow the holder to have complete control over his or her ownership. Once an investor receives a certificate, he or she can either sell it immediately or keep it until the company directors issues a new certificate. This means that an investor no longer has to sit waiting for a company directors meeting to decide on the ownership of his or her shares. This also eliminates the risk of being sold shares and having the shareholders vote on whether the sale of ownership should go through.
Investing in shares has never been so easy. By obtaining a share certificate, an investor is essentially putting his or her investment into a paper and binding contract. However, this doesn’t mean that it’s not still very much up to date. It simply means that the paperwork involved in putting these shares into the hands of a company directors doesn’t have to be complicated and can be done online very easily.