when companies issue shares in the market shareholders who buy in are issued a share certificate the share certificate basically acts as a receipt for the purchase and ownership of shares in the company the document certifies registered ownership of shares from a particular date 
key information on a share certificate includes in the u k the companies act 2006 directs that a company must issue a share certificate when any shares are allotted issued the company must issue a share certificate within two months of the issue or transfer of any shares companies may issue just one certificate for all the shares issued or transferred at a particular time except if a shareholder requests separate certificates 1sometimes a shareholder with a stock certificate can give a proxy to another person to vote the shares in question similarly a shareholder without a share certificate may give a proxy to another person to allow them to vote for the shares in question voting rights are defined by the corporation s charter and corporate law a share certificate that is damaged lost or stolen can be reissued with a replacement certificate in respect of the same number of shares the shareholder in such a case must return the damaged document to the company before a replacement can be issued at this time the shareholder may also exercise the right to be issued a single certificate or separate certificates historically share certificates were required for proof of entitlement to dividends each time a certificate was presented the receipt for the payment of dividends was endorsed on the back this way all records of dividend payments were attached to the document in the digital age investors rarely use physical share certificates and instead rely on electronic proof of ownership disadvantages of issuing a share certificatethere are several disadvantages of issuing a share certificate from the company s perspective the primary drawback comes down to time and money issuing paper stock certificates is labor intensive and represents a big expense in fact businesses usually need an entire team dedicated strictly to managing the share certificate system there is a tremendous amount of tedious clerical work involved in maintaining a stock certificate system for example all transactions such as a merger or spinoff can only proceed when the paper certificates are signed and mailed to the company also compliance becomes much more difficult to address moreover ownership is very difficult to keep up with as shareholders can pass the certificates to someone else without notifying the company it all adds up to a significant amount of back office work to verify identities in order to sign off on the transfer of ownership in other words the company has to keep track of the shares at all times this is typically done through a computer system finally if a shareholder has their paper certificate lost or stolen it means a lot of work for the company specifically the business has to find the old shares verify ownership put a stop on the paper certificates and then issue new paper certificates obviously this process is also a headache for the shareholder the bottom line is that documenting tracking and verifying transactions with paper stocks is very challenging the dutch east india company issued the first stock certificate in 1606 it was worth 150 dutch guilder 2special considerationstoday in modern financial markets individual investors rarely take physical possession of their share certificates in fact some countries have completely abolished the issue of share certificates as proof of share ownership in a company and have streamlined the process of registering owners via electronic registration in the united states the depository trust company dtc is responsible for electronically holding shares either in certificated or uncertificated dematerialized form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates 3a share certificate can be in either a registered form or bearer form a registered share certificate is only evidence of title ownership while a bearer share certificate now uncommon entitles the holder to exercise all legal rights associated with the stock many share certificates especially older and rarer specimens have become extremely collectible for their historical context and the beauty and intricacy of their design scripophily is the collection and study of share certificates and other similar financial documents similar to stamp collecting or banknote collecting a share certificate s value is dependent on its condition and age 