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. I hold stock certificates in a company that just had a stock split. What happens ...

    The short answer is that a stock split will have little effect on the holder of stock certificates. In most cases when an ... Read Answer >>
  2. 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 >>
  3. What protects an investor’s interest in the case of terrorist sabotage, or act of ...

    Currently, most stock ownership is done electronically thru the combined effort of the brokerage firms and the transfer agents ... Read Answer >>
Related Articles
  1. Investing

    What Does a Transfer Agent Do?

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

    Old Stock Certificates: Lost Treasure Or Wallpaper?

    What if you've discovered some old shares in bearer form? Follow our tips and find out what they're worth.
  3. Investing

    Old Stock Certificates: Lost Treasure?

    Today, most stocks reside electronically in a broker’s computer. But it is possible to stumble across a physical stock certificate.
  4. 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.
  5. 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.
  6. 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.
  7. Investing

    Finding A Good Real Estate Agent

    Don't go it alone in the real estate market. We'll show you how to find the help you need.
  8. 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.
  9. Investing

    Do You Need A Real Estate Agent?

    There's no guarantee that realtors will act in your best interest, but it may be worth hiring one anyway.
RELATED TERMS
  1. Transfer Agent

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

    A term used to describe the department of a brokerage firm that ...
  3. Push Out

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

    The procedure by which ownership of a stock moves from one party ...
  5. Share Certificate

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

    A bond or debt investment, usually in a public corporation, that ...
Hot Definitions
  1. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  2. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  3. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
  4. Dark Pool

    A dark pool is a private financial forum or exchange for trading securities.
  5. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  6. American Opportunity Tax Credit

    A tax credit that enabled more student and parents to pay for part of their college expenses in the 2009 and 2010 tax years ...
Trading Center