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. What do states do with unclaimed property?

    Unclaimed property refers to personal accounts in financial institutions or companies that have had no activity and whose ... Read Full Answer >>
  2. How do financial advisors execute trades?

    Today, almost every investor invests through online brokerage accounts. Investors often believe that their trades are directly ... Read Full Answer >>
  3. What are ComputerShare's escheatment services?

    Escheatment is the process by which ownership of abandoned property is transferred to the state. Escheated property can include ... Read Full Answer >>
  4. How does escheatment affect a company's shareholders?

    Escheated property in the United States is a designation for personal property such as bank accounts, shares, insurance proceeds, ... Read Full Answer >>
  5. How do modern companies assess business risk?

    Before a business can assess or mitigate business risk, it must first identify probable or likely risks to its bottom line. ... Read Full Answer >>
  6. Why has emphasis on corporate governance grown in the 21st century?

    Corporate governance refers to operational practices, management protocols, and other governing rules or principles by which ... Read Full Answer >>
Related Articles
  1. Stock Analysis

    Forest Laboratories: An Activist Investment Analysis

    Find out how patience and perseverance paid off big-time for billionaire activist Carl Icahn during his four-year fight with Forest Laboratories.
  2. Stock Analysis

    Tribune Media: An Activist Investment Analysis (TRCO)

    Learn more about the breakup of Tribune Company, once a powerful newspaper and broadcasting giant, and the role of activist investor Cliff Robbins.
  3. Stock Analysis

    PepsiCo: An Activist Investment Analysis (PEP)

    Read about the nearly two-year public feud between activist investor Nelson Peltz, head of Trian Fund Management, and iconic soft drink maker PepsiCo.
  4. Stock Analysis

    Hologic: An Activist Investment Analysis (HOLX)

    Read about a health care company that attracted activist investors Carl Icahn, Barry Rosenstein and Ralph Whitworth at the same time.
  5. Stock Analysis

    Air Products and Chemicals: An Activist Investment Analysis (APD)

    Learn about the productive, and uncommonly friendly, activist investment made by Bill Ackman into Air Products and Chemicals.
  6. Economics

    Why Enron Collapsed

    Enron’s collapse is a classic example of greed gone wrong.
  7. Investing Basics

    An Introduction To Structured Products

    Structured products take a traditional security and replace its usual payment features with a non-traditional payoff.
  8. Stock Analysis

    4 Executives Who May Be On Thin Ice in 2016 (CMG,TWTR)

    Find out the reasons why these executives of underperforming companies may find themselves on the chopping block in the coming year.
  9. Stock Analysis

    Fortune Brands Home & Security: An Activist Investment Analysis (FBHS)

    Read about Bill Ackman's highly successful breakup of longtime holding company Fortune Brands in one of the most profitable examples of Wall Street activism.
  10. Stock Analysis

    Clorox: An Activist Investment Analysis (CLX)

    Read about the high-profile battle between The Clorox Company and billionaire activist investor Carl Icahn, who had three offers repelled by the Clorox board.
RELATED TERMS
  1. Share Repurchase

    A program by which a company buys back its own shares from the ...
  2. Board Of Directors - B Of D

    A group of individuals that are elected as, or elected to act ...
  3. Issued Shares

    The number of authorized shares that is sold to and held by the ...
  4. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  5. Corporate Culture

    The beliefs and behaviors that determine how a company's employees ...
  6. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center