Historical Stock, Securities, Certificates, Fund, Bonds
A stock certificate is proof that a person has ownership in a company. Stock certificates have a lot of information on them – the number of shares purchased, date purchased, identification number along with a corporate seal and signatures of officials. Slightly larger than a regular sheet of paper, they contain designs which make replication difficult. However safely certificates are stored, they can get damaged or lost.
Why are stock certificates important?
In the last couple of decades, companies have started recording stock purchases and maintaining them electronically. Electronic databases make it easy to track purchases and sales as well as distributing dividend. Investors can still choose to receive physical stock certificates. So, an investor who is unable to find a physical copy, may want to get a replacement. The process entails filling out and filing a completed affidavit of lost stock certificate. According to some estimates, there are ca. 50 million physical stock certificates in circulation. Often, these documents are stored in safety lockers, in file folders or in the garage (in a box).
In case of loss or damage, investors can contact the company’s transfer agent directly for help with new certificates. Every company’s investor relations division will have information on how to contact an agent. Getting replacement certificates is useful if shares are willed to you by your parents or relatives.
What is an emergency affidavit of lost stock certificate?
An affidavit is an official document in which a shareholder states that his/her stock certificate is missing. The reasons for this could be inadvertent destruction, theft or loss. They wish to have a replacement certificate stating ownership of said stocks and agree to defend, indemnify, or reimburse the company which issued the original certificate for new ones. It is not difficult to get a replacement certificate. All a stockholder must do is to verify ownership by filing this affidavit. This, like other affidavits, must be made and executed in front of a Notary Public for signature verification.
Do you need a stock certificate to prove ownership?
Since companies now maintain information in electronic databases, investors don’t get a paper certificate. The process of buying and selling shares is handled by the Central Securities Depository. If you have a paper version and it gets lost or damaged, you have the option to file an affidavit. This helps you to track your investments.
Why is it important to file an affidavit?
Keeping stock certificates safe is a priority for most investors but these can get lost or destroyed by accident. Papers do get misplaced during a move as well. If you own stocks and find yourself in a situation where you cannot find them, There are ways you can get a replacement certificate. Having a certificate on hand will help you track your investments or sell them if necessary. Companies require stockholders or their heirs to provide affidavits to get replacement certificates. There are some guidelines, which when followed, will help applicants to resolve the issue quickly. Replacement certificates will help you keep an investment which would otherwise be lost. Unendorsed stock certificates can be used to transfer ownership.
What you should do if you cant find your stock certificates
If you realize that your stock certificates for one or more companies are missing, talk to a transfer agent. They can help you to stop any transfer of ownership. This gives you time to apply for an emergency affidavit of lost stock certificate. The agent will report the loss to the Securities and Exchange Commission.
- Do not waste time applying for an emergency affidavit of lost stock certificate as you risk losing an investment.
- You can also choose to convert stock certificates to an electronic version – as book entry shares. This step ensures that you still own the shares, just not a physical certificate. This simplified process reduces the paperwork for all involved parties.
- If you want physical stock certificates and apply for replacements, make copies of the new certificates. Put them in a safe place like a bank locker so that they are safe.
What to do if you inherit stocks as a joint owner without stock certificate
If you are a joint beneficiary on an account, you must notify the brokerage firm. If the stock has to go through probate court, you have to provide the following documents:
- A copy of the primary owner’s death certificate
- Proof of your identity (social security number, passport, driver’s license)
If you are the executor of an estate, you have to get a letter authorizing you to act on behalf of the dead person. The court will then review the will and supporting documents before determining inheritance. Even in this case, a transfer agent will handle the transfer of securities/stocks for the issuing company. Notary Services and Medallion Signature Guarantees are offered banks and credit unions.
Provide the notarized documents to the court and later to the transfer agent with a copy of the will. This will help them to make you the legal owner faster.
When do you need to apply for an emergency affidavit of lost stock certificate?
You apply for this affidavit when you cannot find your stock certificates. You can also apply if you get an inheritance and do not have details on the stocks and the amount. You will have to do some research to find out if these stocks are still listed in your relative’s name and the face value. Ensure your ownership is clear cut and that they have not been sold or transferred. Then you can apply for an emergency affidavit. The process to apply for an affidavit is simple.
- Stock description: The first thing to do is to provide a thorough description of the missing or damaged stock. Mention the face value, the number of shares, type of stock, date of issue, and the name of the company which issued the shares.
- Endorsement: You should mention whether the certificates were endorsed or not before they were misplaced or lost. If yes, then how they were endorsed, Was it signed on the back, stock power or some other way? If you have pictures, this makes the process much easier. Endorsement information is important as it will determine the effectiveness of the affidavit application. It could be that someone else has executed a transfer into their name and voids your ownership of the stocks.
- Tracking activity: In this step, you describe what you did to find the lost stock certificates. Put down as much information as you can remember. Also include that you made a reasonable effort to find the documents. If the documents are damaged, explain how the damage occurred, This will make the request for replacement, not loss clear.
- Notarization: There are many stock replacement affidavit templates online that you can use. If you are not sure, then you can get help from a lawyer. After filling out the required documentation, you must go to a Notary Public to get your signature on the application verified. An online search can help with a list of local notaries and their addresses. You will have to take two forms of identification for proof.
Following these guidelines increases your chances of getting a certified copy of your stock certificates.
After you get the emergency affidavit of lost stock certificate prepared and notarized, send it to the transfer agent working for or with a company. You may be asked to buy an indemnity bond to protect the transfer agency and the issuing company if you plan to redeem the shares. Transfer agencies charge a fee to help with such transactions and these range between 1%-5%. You will also have to pay a fee for getting certificates issues. These rates vary as well, so find out what the costs are before applying. Transfer agents will verify the information in the affidavit and then issue your new share certificates.
Samples of Emergency Affidavit of lost stock certificates
AFFIDAVIT OF LOST STOCK CERTIFICATE
This affidavit of Lost Stock Certificate is effective as of MM/DD/YYYY.
Between (Stockholder name)
And (Company Name)
The undersigned declares, under the penalty of perjury that:
1. He/she is the owner of (number of shares) of the stock of (Name of Company) Inc., Located in (state in which the company was set up and incorporated).
2. He/she has examined existing records thoroughly and is unable to locate the certificate(s) representing such shares as mentioned in the certificate and believes these to be lost.
3. He/she has not transferred, sold, or pledged the shares mentioned in the certificate(s)
4. He/she releases the Company and successors (if the company has been sold to another or merged) from liabilities related to the loss of the certificates. The company is also released from liability on issuance of new certificates. He/she also agrees to indemnify and hold harmless the Company and/or its successors from damage/loss caused by the loss of said certificates.
5. In the event the original certificates are found, the undersigned agrees to return the originals immediately to the Company, with “CANCELLED” marked on the face of the certificate.
IN WITNESS THEREOF, the parties mentioned below have executed this Agreement on the date mentioned above.
Authorized Signature Authorized Signature
Print Name and Title Print Name and Title
STATE OF ___________________
COUNTY OF __________________
Your full name, of your address, being duly sworn and hereby swears and affirms as follows:
1. I am of legal age, and the sole beneficiary/owner legally (“Shareholder”) of _____________ shares of _____________ stock, __________________ face value, of __________ corporation, (the “Company”), represented by certificate numbers ____________ (“Original Certificate(s)). These were issued on _______________ by the Company in the name of the shareholder ___________.
2. The original certificates have been ____________.
3. None of the original certificate(s), or the said shareholder’s rights in them have been, in whole, or part, been assigned. These have also not been transferred, gifted, pledged or otherwise disposed of in any manner.
4. The shareholder is entitled to the exclusive and full possession of the original certificate(s). No other person or entity has any interest in the original certificate(s) or the sale proceeds of these.
5. If the shareholder ever locates the original certificate(s), or they are returned to the shareholder, he/she agrees that the original certificates have no value. The original certificates will be surrendered upon recovery to the Company immediately, without consideration for cancellation.
6. The shareholder requests herewith and makes this affidavit for the purpose of requesting the Company to issue new/duplicate certificates. These are a substitute for the original certificates.
[SIGNATURE PAGE FOLLOWS]
The shareholder is signing this affidavit on the date mentioned below.
Signature of ______________________
State of _______________________
County of ____________________
Subscribed and sworn to before me, this ______day of _______, 20___, at _______, _________.
AFFIDAVIT OF LOST STOCK CERTIFICATES
The undersigned (“Deponent”) is duly sworn, deposed and affirms as follows:
1. Deponent is an adult who lives at ___________________________________________ (Address) and is the legal beneficiary. He/she may be acting in a representative or fiduciary capacity. He/she is a representative for the following securities (the “Securities”):
_______________________________ (Issuer Name), ____________________________ (Certificate Number(s)),
______________________ (Number of shares).
2. The Deponent further affirms that the securities have been [ ] Lost [ ] Stolen.
3. That the Securities were not endorsed.
4. That the securities have not in whole or part been assigned, or transferred. They have not been pledged, hypothecated, or otherwise disposed of in any manner. There is no other person or entity other than the Deponent with a right, claim, title, or interest in the same.
5. The Deponent agrees that if the Securities should ever be found or recovered, he/she will immediately return them to the company. This surrender of securities is done for cancellation by the company.
Printed Name: _________________