A:

Regardless of whether a shareholder loses his or her stock certificate, that person still owns the shares. However, in order to replace the physical certificate, the shareholder must contact the company's stock transfer agent.

The corporation should be able to provide the shareholder with information on how to contact the transfer agent. The best strategy is to contact the company's investor relations department..

Upon notifying the transfer agent of the loss, the agent will place what is called a "stop transfer" on the certificate to prevent others from cashing it in. This is much like the stop payment that you might place on a check at your local bank. The transfer agent or the broker-dealer will then notify the SEC of the lost or missing certificates.

There is some information that the shareholder must also provide.

First, the shareholder must describe the loss and any facts surrounding the loss in an affidavit. Second, the shareholder must purchase an indemnity bond. The purpose of the bond is to protect the corporation and the agent in case the lost certificate is somehow redeemed by another party at a later date. (Think of it simply as additional insurance). Note: The cost of this bond is typically 1-3% of value of the shares.

In any case, when this information has been provided, a new certificate will then be issued.

Remember to photocopy both sides of the certificate when you receive it. This may help speed up the re-issuance process should the certificate be lost or stolen. You may also hold the security in street name. That way, your brokerage firm will hold the physical security for you.

For further reading, see What Owning A Stock Actually Means.

RELATED FAQS
  1. How do you get a hard copy of a stock certificate?

    Before online brokers and personally-directed accounts, holding a physical stock certificate was a necessity, as this was ... Read Answer >>
Related Articles
  1. Investing

    What Does a Transfer Agent Do?

    Transfer agents maintain the records and documents related to shareholder accounts.
  2. Insights

    What Is a Silver Certificate Dollar Bill Worth Today?

    Although a silver-certificate dollar bill no longer can be exchanged for silver, the date, grade and unique features make certain certificates very valuable.
  3. Financial Advisor

    How to Find the Best Life Insurance Agent

    Choosing a life insurance agent is the first and most important step in obtaining coverage. Buyers should pay attention to five key factors.
  4. Financial Advisor

    A Day In The Life Of A Real Estate Agent

    While every day is unique for a real estate agent, there are some activities that may be a typical part of an agent's day.
  5. Investing

    How Real Estate Agent and Broker Fees Work

    Buying or selling a home? What you need to know about real estate agent and broker fees.
  6. Investing

    What Real Estate Agents Don't Want You To Know

    While they can be instrumental in helping you buy or sell a home, real estate agents may ulterior motives.
  7. Investing

    How To Find The Best Real Estate Agent

    Most people don't have the time, expertise or motivation to go it alone and finding a good real estate agent becomes essential to enjoying a smooth real estate transaction.
  8. Investing

    Would You Make A Good Real Estate Broker?

    How to tell if you'd be good in this field. It is a common second career for many people, but isn't a good match for everyone.
  9. Investing

    How to Choose the Right Real Estate Broker

    Buying or selling a home can be the largest financial transactions of your life. Here's how to choose the right real estate broker or agent.
RELATED TERMS
  1. Transfer Agent

    A trust company, bank or similar financial institution assigned ...
  2. Transfer Procedures

    The procedure by which ownership of a stock moves from one party ...
  3. Push Out

    One of two ways to effect a stock split. In a push out, new share ...
  4. Cage

    A term used to describe the department of a brokerage firm that ...
  5. Share Certificate

    A share certificate is a written document signed on behalf of ...
  6. Currency Certificate

    A note that grants the holder the right to convert a specific ...
Hot Definitions
  1. Interest Expense

    The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. ...
  2. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  3. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
  4. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  5. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  6. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
Trading Center