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 with the Securities Institute!
Personal FinanceIf cost is your primary concern, there are several cheap(er) ways to move funds.
Personal FinanceBefore you take advantage of that new credit card's 0% interest balance transfer offer, read our step-by-step guide.
InvestingTransfer agents maintain the records and documents related to shareholder accounts.
InvestingWhat if you've discovered some old shares in bearer form? Follow our tips and find out what they're worth.
Small BusinessLimited liability is a legal concept that protects equity owners from personal losses due to their ownership interest in the company.
Personal FinanceThe pros and cons of credit card balance transfers.
Personal FinanceNeed to send money in a hurry? Here's a list of the major players in the money transfer business. Compare rates, times and other details before deciding.
InvestingUnderstand 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.
InsuranceIf you are banking on your life insurance payout being tax-free, you may be in for a surprise.
Personal FinanceBefore you transfer a balance to a credit card with a lower interest rate, know how it affects new purchases and other fine-print traps that can cost you.