A stockholder’s liability is limited to the amount of money they invested in the stock. They cannot be held liable for any amount past their invested capital.
Common stock and most other securities are freely transferable. That is to say that one investor may sell their shares to another investor without limitation and without requiring the approval of the issuer. The transfer of a security’s ownership, in most cases, is facilitated through a broker dealer. The transfer of ownership is executed in the secondary market on either an exchange or in the over-the-counter market. Ownership of common stock is evidenced by a stock certificate which identifies:
- The name of the issuing company
- The number of shares owned
- The name of the owner of record
- The CUSIP number
In order to transfer or sell the shares the owner must endorse the stock certificate or sign a power of substitution known as a stock or bond power. Signing the certificate or a stock or bond power makes the securities transferable into the new buyer’s name.
Ace the series 62 exam - Securities Institute
Personal FinanceBefore you take advantage of that new credit card's 0% interest balance transfer offer, read our step-by-step guide.
ETFs & Mutual FundsTransfer agents maintain the records and documents related to shareholder accounts.
InvestingTrying to pay off a credit card balance at too high an interest rate? You might save a good chunk of cash with one of these balance transfer promotions.
InvestingLimited liability is a legal concept that protects equity owners from personal losses due to their ownership interest in the company.
Personal FinanceUnderstand why it may be difficult to send large sums of money internationally. Learn about the top five ways to send large sums of money abroad.
Entrepreneurship & Small BusinessLearn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
InvestingToday, most stocks reside electronically in a broker’s computer. But it is possible to stumble across a physical stock certificate.
Personal FinanceThis option can save you big bucks, but only if you watch out for rates and fees.
Personal FinanceIf you are banking on your life insurance payout being tax-free, you may be in for a surprise.
InvestingWithout a doubt, common stocks are one of the greatest tools ever invented for building wealth.