What is a Share Certificate?

A share certificate is a legal document that serves as evidence of ownership of a certain number of shares in a company. It is issued by the company and typically contains the name of the shareholder, the company name, the amount of shares owned, the date of issue, and the signature of the company’s authorized representative.

Types of Share Certificates

Share certificates come in two main types: ordinary shares and preference shares. Ordinary shares represent basic ownership rights including voting rights and the ability to receive dividends. Preference shares, on the other hand, do not have voting rights but instead provide the shareholder with a preferential rate of dividend and the ability to receive returns before ordinary shareholders.

Benefits of Holding a Share Certificate

Holding a share certificate has a number of benefits, including:

• Provides evidence of ownership
• Gives the holder voting rights
• May entitle the holder to receive dividends
• May entitle the holder to preferential returns
• Protection from creditors

Example of a Share Certificate

A share certificate typically contains the following information:

• Name of the shareholder
• Company name
• Amount of shares owned
• Date of issue
• Signature of the company’s authorized representative

Conclusion

A share certificate is an important document that serves as evidence of ownership of a certain number of shares in a company. It comes in two main types: ordinary shares and preference shares. Holding a share certificate has a number of benefits, including providing evidence of ownership, giving the holder voting rights, entitling the holder to receive dividends, and protecting the holder from creditors.