Issuing Stock Certificates for a Delaware Corporation
You’ve set up your new Delaware corporation, obtained the EIN (also known as a Federal Tax ID Number), opened the bank account, elected the Board of Directors and appointed the officers—what’s next?
Often, the most exciting time for a new Delaware corporation is when the day arrives to issue stock certificates. Corporate stock certificates represent an individual's ownership of a specific number of shares in the company.
Whether you’re looking to raise capital, go public or attract investors, traditionally, ownership of the corporation is displayed by issued shares of stock.
Our Delaware Stock Certificates
When you file your Delaware corporation with us, we provide the tools necessary to help with the issuance of shares. A Deluxe Corporate Kit is Included in our Standard package; the Corporate Kit includes customized Delaware stock certificates, a stock transfer ledger and a handheld corporate seal.
Each Delaware stock certificate is individually numbered and includes a space for the number of shares, the name of the new shareholder, the signature line for the president and corporate secretary authorizing the shares and the designated area in which to place the corporate seal. This information can be handwritten, or input as a PDF, then printed directly on the stock certificate.
Are Stock Certificates Required?
For the most part, physical stock certificate are no longer mandatory in every jurisdiction. In modern corporate practices, electronic record-keeping and book entry systems have become more prevalent. Nevertheless, you'll find that some individuals still request a physical stock certificate.
The stock transfer ledger will help with the documentation of the transaction, including the name of the shareholder, the address, the time and date of the sale, the certificate number, the number of shares issued, the issuer of the shares and the amount paid.
Keeping up-to-date records on both the issued shares and the shareholders is invaluable when it’s time to file the annual report for the Delaware Franchise Tax. It can also help settle any disagreements, should any disputes arise in the future.
The handheld corporate seal, which is the official signature of the corporation, includes the company name, the year and the state of Delaware. We now also include a digital corporate seal for all our clients as an alternative, which is a point-and-click version of the traditional handheld style, allowing for it to be on multiple computers in different locations.
If you have questions about how stock certificates for your new Delaware corporation, contact any of our friendly customer service representatives today via phone (1-800-345-2677), email or live chat.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There are 2 comments left for Issuing Stock Certificates for a Delaware Corporation
Richard said: Thursday, November 29, 2018I recently set up a Delaware corporation with your company. You guys are AWESOME! Super fast and even set up two classes of stock. I highly recommend working with you. MY Question: I understand that all stock transactions need to be entered into the Stock Transfer Ledger. Do these transactions also need to be registered with a government agency? Thanks Richard
HBS Staff replied: Thursday, November 29, 2018Richard, thanks for the kind words and recommendation. We take customer service very seriously!
Stock transfers do not need to be filed with the state. They can be maintained internally by the corporation. For more information, check out: https://www.delawareinc.com/blog/everything-you-need-to-know-about-stock-transfers/
Ricky Roodal said: Friday, March 9, 2018Please forgive my Ignorance . How can I go about checking the authenticity of a Stock certificate from a company under the laws of Delaware. Honestly I think I was scammed but I am praying I was not Company EMC Development Corp
HBS Staff replied: Friday, March 9, 2018We cannot answer this for you, unfortunately. Perhaps contact an attorney or financial advisor, or even the SEC.