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Becoming Shareholders Of A Company Through Stock Certificates

To provide for daily needs, each person is engaging in a form of activity that earns them some money for this. Most people earn a living through common ways such as working for companies or other manual jobs but there are other ways to make money. Shareholders are provided with stock certificate to prove their ownership of part of a public company. At times a company may decide to become public and they invite people to buy shares of the company to raise more money to run the business. Persons are presented with the certificate so that they can use it to claim dividends gained by the company in the future. This is a great opportunity to invest since the business may end up being very successful resulting to large amounts of profits for the shareholders.

Initially, these certificates were given in paper form which was uniquely designed for each person buying the shares. These documents contained personal information such as the name of holder, amount contributed and some identification number assigned at the time of buying. It was designed to be difficult to forge through incorporating other things like seals and watermarks unique to the company and the investor. Before being given the profits, the company first checked for the authenticity of the certificate to avoid fraud. The advancement in technology has led to the evolution of these certificates making them to be digital rather than the previous paper form.

The companies usually manage the certificates and ensure to keep track of all processes done through the certificate into computing systems. It is easier dealing with such digital forms known as book-entry since it eliminates the extra work needed to print and file paperwork. However, companies are obligated to give paper forms of the certificate to shareholders if they request for such. Usually a shareholder can only have one form of the certificates either the digital form or paper stock form but not the two of them at once. To claim a paper stock form, one can use various channels such as going through a broker to arrange for it to be made.

Clients can hire brokers to be responsible for all their transactions regarding the stock and the company. Companies also allow for their clients to directly request for the certificate personally without hiring brokers. The another channel of acquiring the forms is by using transfer agents such as banks to be links between clients and the firms. The process of managing stocks is easier nowadays due to their availability online making them accessible at all times from anywhere. Considering fees charged by the brokers is important before hiring their services.