What is a share certificate?

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Could you please tell me what a share certificate is? I was looking through some company formation guidance and it mentioned that you receive share certificates when you register a new company. I have no idea what these are or what they are used for so I am just looking for a simple explanation because i don’t see what it has to do with starting a new business that’s not on the stock market.

Answers

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A share certificate is basically a receipt that confirms ownership of shares in a limited company. There is no legal requirement to issue certificates to shareholders, but it’s handy and most people prefer to have them. It makes life easier, gives peace of mind to the shareholder and helps a company keep track of when and to whom shares were issued.

A certificate should state the following information:

  • Name and registration number of company in which shares are held
  • Registered office address
  • Certificate number
  • Date of issue (usually the date the shares are purchased)
  • Name and contact address of shareholder
  • Number, type and nominal value of shares
  • Authorising signature of director

You can issue paper or digital certificates and you should keep copies at your registered office address. Click here for an example of standard share certificate template

10 months ago
 

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