What Is a Circulated Stock Certificate?
- When an individual owns a share of a company's stock, whether electronically or in paper format, he is considered a partial owner of that company. As such, he is entitled to a portion of that company's annual profits, issued in the form of dividends. If the stock is part of a publicly traded company, the performance of that stock can be monitored and tracked through an exchange like the New York Stock Exchange or Nasdaq.
- Until stock became available for electronic trading, companies issued every stock certificate in paper format. A stock certificate has the name of the company issuing the stock printed on the front, the amount of shares owned and a place for the owner to sign and certify the stock. According to the Depository Trust and Clearing Corporation, paper stock certificates cost companies millions of dollars each year to produce. The delicacy of paper meant that certificates could easily be damaged or lost, making them inconvenient for investors. As of 2009, brokerage firms no longer deliver stock certificates or they apply fees to discourage such requests.
- Circulated stock certificates can be found in stockholders' homes, safes and safe deposit boxes. Many older companies have been bought by -- or have merged with -- other companies, so a stock certificate may still be valuable even if it is issued under a company name that no longer trades on an exchange. If you own a stock certificate, you can find out its value via a brokerage firm, stock exchange, online resource or public library. Likewise, if your stock certificate is lost or damaged, you may be able to fill out an affidavit to reclaim it.
- Because we live in a digital age, many types of printed materials, including stock certificates, have been eliminated in favor of their cheaper, more reliable and convenient electronic counterparts. Likewise, electronic stock trading has made it easier for investors and brokers to carry out trades almost instantaneously. Stock certificates may still have value, but they are considered novelties of a bygone era.
